), an exploration and production outfit, is a top choice, says Joseph Zock, president of Capital Management Associates. At 66, the shares are up 22% year-to-date and make the company worth $11 billion. Zock expects the price to hit 80 in 12 months. (The stock was featured in the Apr. 30, 2001, issue of this column at a split-adjusted 54.) Today, the price-earnings ratio is still just 12, based on 2004 earnings estimates of $5.41 a share, according to Thomson First Call. Standard & Poor's Stock Reports rates the stock "accumulate," figuring it's too cheap by 10% to 15%. Apache's forte is buying miscellaneous oil and gas properties being cast off by the oil giants. It reengineers the fields to boost production. This year, it bought properties from BP (BP
) in the Gulf of Mexico and the North Sea. In turn, Apache's production in the second quarter rose from a year earlier by 26%, twice the industry average. "They're great at acquiring, and they get more out of the wells than most people," says Zock.
Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them. By David Henry