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Tim Biggam, TradingBlock  (December 9, 2011, 3:08pm CST)

Apache Corporation (ticker: APA) is an independent oil and gas company based in Texas. It has operations in Gulf of Mexico, Texas, Permian and Anadarko basins. It also has exploration and production interests in several other countries around the globe.

Last quarter. the company reported earnings of $2.95, or 10 cents above expectations. With revenues of $4.3 billion coming in almost 45% higher than the prior year, APA is selling at just 6 times cash flow and 1.3 times book, both trough valuations. Its forward multiple of under 7 is also nearing historically cheap valuation levels.

Apache had been a relative market performer until August, with the stock underperforming the S&P 500 by nearly 20% since then. It has also underperformed its peer group by a similar amount. As such, I look for APA to move to 105 by April expiration.
 
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Based on Apache Corporation (ticker: APA) current market price of $97.48 and using a target price of $105.00, a target date of April 20, 2012 and $10,000 of investment capital, below are three options strategies (ranked by potential profit) and a comparative stock trade to consider should the price target be achieved at the target date. 

Click on the strategy name below to access trade details using TradeBuilder on TradingBlock.com. Powered by TradingBlock's TradeBuilder.

* Click link to access TradeBuilder details on TradingBlock.com. Must have Instant or Actual account. Subject to change due to changing market conditions.  Click here to view risks regarding selling stock short.

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