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Apache Stock Buoyed by Crude Oil, Merger-Acquisition Speculation

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Apache’s moving averages

Apache (APA) stock was mostly volatile in 2015. But since the start of 2016, the stock has mostly been on an uptrend. It’s been boosted by crude oil prices (USO) and speculations about a potential merger or acquisition (read Part 1).

On March 2, 2016, APA crossed its 50-day moving average for the first time in 2016. But recently, APA moved below its 50-day moving average. On June 17, 2016, APA stock was trading ~1.7% below its 50-day moving average.

APA stock also crossed over its 200-day moving average in March. It has yet to trade above it. APA’s 50-day moving average is now trading above its 200-day moving average, which the Markets see as a bullish sign.

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A quick earnings review and peer comparison

Apache reported its 1Q16 earnings on May 5, 2016. The company announced adjusted revenue of ~$1.05 billion. Wall Street analysts’ consensus estimate for APA’s revenue was ~$1.09 billion. Revenue was ~42% lower than its 1Q15 revenue of ~$1.8 billion.

1Q16 adjusted EPS (earnings per share) was -$0.40, lower than analysts’ consensus estimate of -$0.89. APA’s 1Q15 EPS was -$0.37.

In comparison, upstream peers EP Energy (EPE), Newfield Exploration (NFX), and Cimarex Energy (XEC) reported 1Q16 adjusted EPS of $0.19, $0.09, and -$0.40, respectively. NFX, XEC, and APA make up 7.7% of the Guggenheim S&P 500 Equal Weight Energy ETF (RYE).

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