Did Natural Gas–Weighted Stocks Outperform Natural Gas?



Natural gas–weighted stocks and natural gas

Between June 20 and June 27, 2016, the equally weighted basket of natural gas–weighted stocks we’re covering in this series fell 8.7%. This compares to a 0.23% fall in natural gas for the same period. These returns are adjusted for dividends. These stocks operate with a production mix of at least 60% in natural gas (GASL) (BOIL) (UGAZ) (FCG). They’re also part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

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Best and worst natural gas stocks

Below are the returns for the best- and worst-performing stocks from our basket of natural gas–weighted stocks from June 20 to June 27:

Natural gas–weighted stocks that outperformed their peers include the following:

  • EQT Corporation (EQT): -2.4%
  • EXCO Resources (XCO): -4.0%
  • Cabot Oil and Gas (COG): -4.3%

Natural gas–weighted stocks that underperformed natural gas include the following:

  • Comstock Resources (CRK): -12.4%
  • Chesapeake Energy (CHK): -12.9%
  • Contango Oil & Gas (MCF): -16.9%

In the previous part of this series, we saw how natural gas impacted these stocks. However, the performance of these natural gas–weighted stocks could also be related to their earnings and movements of crude oil (USO) (UCO) prices.

Performance of natural gas–weighted stocks and natural gas since their 2016 lows

On March 3, 2016, natural gas futures touched a 17-year low of $1.64. From March 3 to June 27, 2016, natural gas rose 67.1%. Our basket of equally weighted upstream stocks rose 31.0% over the same period. Here’s how some of the companies in the basket performed over this period.

The following natural gas–weighted stocks were among the outperformers:

  • Rice Energy (REXX): 110.3%
  • WPX Energy (WPX): 59.1%
  • Contango Oil & Gas (MCF): 64.6%

The following natural gas–weighted stocks didn’t fare as well:

  • Rex Energy: -37.2%
  • EXCO Resources (XCO): -6.9%
  • Chesapeake Energy (CHK): -4.9%

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