Taking a look at Apache's (APA +0.38%) footprint in the energy production space, its tough to determine exactly why the company is down 43% since April 29, 2011. One reason that the investment community has focused on for this downward spiral is its exposure to Egypt. Being the largest producer in this region during the last couple of years, which included the Arab Spring and the overturn of the Egyptian government, has taken its toll. Even though temperatures have cooled there, uncertainty still seems to be reigning supreme with regards to Apache's share performance.
How does Apache stack up against its peers?
Looking at the company's return on equity average for the last three years compared to peers also leads me to believe that it is performing well enough to warrant the discount its trading at to be erased. Apache is currently trading at a 15.4 times price-to-earnings ratio, below the likes of Devon Energy (DVN +0.72%), EOG Resources (EOG +0.79%), and Anadarko Petroleum (APC +0.00%), all while leading this group with its three-year average ROE of 13%. I believe this imbalance is likely to correct as the company's assets begin performing up to expectations, which could mean great things for Apache shareholders.
Hear the details on Motley Fool analyst Taylor Muckerman's position on Apache in the following video:
