Another large contributor for the quarter was Apache (NYSE:APA), a U.S.-based oil and gas exploration and production company. The company reported great results during the quarter, in our opinion, and it is growing production more than expected, despite spending less on capital expenditures than had been forecast. This is a great combination of factors for a company in the energy space, which is notorious for capital inefficiency, and it should lead to excellent cash flows over time. Additionally, management announced plans to repurchase 2.5% of shares and return at least 50% of free cash flow and asset sale proceeds to shareholders going forward. Despite the stock’s rally, we still believe it remains quite inexpensive.
- From Bill Nygren (Trades, Portfolio) and David Herro (Trades, Portfolio)'s Global Select Fund first-quarter 2019 shareholder letter.
