APA Corporation (APA): Among The Lowest PE Ratio Stocks in S&P 500 (ready for edit 2)

We recently published a list of 10 Lowest PE Ratio Stocks in S&P 500. In this article, we are going to take a look at where APA Corporation (NASDAQ:APA) stands against other most undervalued stocks.

Big tech stocks just suffered a massive hit, with the Magnificent Seven shedding a combined $1.8 trillion in market value over two brutal trading days at the beginning of April 2025. The iPhone-maker was hit the hardest, dropping more than $533 billion, partly due to new tariffs targeting its overseas production. Elon Musk’s EV giant fell over 10% on April 4, and Wall Street’s semiconductor darling lost nearly $400 billion. Jeff Bezos’ e-commerce powerhouse also saw its worst losing streak since 2008. The selloff came after Donald Trump’s newly announced tariffs sparked fears of a global trade war and potential recession. It did not just impact the mega-caps; the pain spread across the tech sector, which saw steep declines in stock prices. Even semiconductor stocks, although not yet directly impacted by tariffs, are being dragged down by growing uncertainty.

Amidst this volatile market landscape, Veteran investor Bill Nygren noted that the chaos caused by Trump’s steep tariffs has opened up a rare window for long-term investors to scoop up undervalued stocks. While he admits the uncertainty is not great for investors and could lead to inflation and slower growth, he sees opportunity in the selloff. Nygren pointed out that many quality companies, including major airlines, banks, and media firms, are now trading at dirt-cheap valuations. Some of them are trading under 7 or 8 times earnings because of overly negative investor sentiment. Nygren believes that if you hold these types of stocks long enough, there is a good chance they will deliver solid returns.

Hedge fund billionaire Warren Buffett also endorses Bill Nygren’s approach. Buffett made his $165 billion fortune by practicing value investing. He is known for buying stocks that are undervalued compared to their true worth and holding onto them for the long run. His approach focuses on companies with robust fundamentals, solid management, and potential for future growth, rather than chasing after risky or short-term trends. Value investing involves looking for stocks with low price-to-earnings ratios, and it often requires investors to go against the market's emotions and short-term movements.

With this outlook in mind, let’s take a look at stocks in the S&P 500 with the lowest PE ratios.

Our Methodology

For this article, we used the Finviz screener and filtered out S&P stocks. Then, we applied a filter to arrange these stocks in ascending order of P/E ratios. We picked the 10 stocks with the lowest P/E ratios to compile this list. We have also mentioned the hedge fund sentiment around the holdings as per Insider Monkey's Q4 2024 database, ranking the list from least to most hedge fund holders.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

APA Corporation (NASDAQ:APA)

P/E Ratio as of April 29: 7.29

Number of Hedge Fund Holders: 34

APA Corporation (NASDAQ:APA) is an independent energy company based in Houston, Texas, and it is involved in exploring and producing natural gas, crude oil, and natural gas liquids. On March 10, Raymond James analysts downgraded APA from Strong Buy to Outperform, reducing the price target to $32 from $45. Raymond James downgraded APA after Q4 results and weaker oil prices. Q1 2025 production was in line with guidance at 465 MBoe/d, but the capex of $765 million was 16% higher than expected. Despite strong margins of 69.18% and a 10% FCF yield, the outlook has turned more cautious as cost-saving measures underdelivered, in addition to no near-term catalysts and oil price uncertainty.

In Q4 2024, APA Corporation (NASDAQ:APA) posted a net income of $354 million, with adjusted earnings at $290 million. The company generated $1 billion in operating cash flow, and production averaged 488,000 BOE per day, and after adjustments, it stood at 418,000 BOE per day. APA generated $841 million in free cash flow for full-year 2024, returned $599 million to shareholders through stock buybacks and dividends, and ended the year with $625 million in cash and $6 billion in debt. Despite taking on over $2 billion in debt with the Callon acquisition, net debt only rose by $300 million.

According to Insider Monkey’s fourth quarter database, 34 hedge funds held stakes in APA Corporation (NASDAQ:APA), compared to 29 funds in the prior quarter. Harris Associates was the largest shareholder of the company, with 25.2 million shares worth $582.3 million. APA is one of the most popular stocks with a low PE ratio.

Overall, APA ranks 10th among the lowest PE Ratio Stocks in the S&P. While we acknowledge the potential of APA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than APA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.