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What Does a Portfolio of Natural Gas–Weighted Stocks Look Like?

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Jul. 12 2016, Updated 10:07 p.m. ET

Natural gas–weighted stocks and natural gas

Between July 1 and July 11, 2016, an equally weighted basket of natural gas–weighted stocks fell 3.2%. These stocks operate with a production mix of at least 60% in natural gas (UNG) (BOIL) (UGAZ) (FCG).

They’re also part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). This compares to a 9.5% fall in natural gas for the same period. The stock returns are adjusted for dividends.

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Natural gas stocks: The best and the worst 

Below are the returns for the best- and worst-performing stocks from our basket of natural gas–weighted stocks from July 1 to July 11, 2016.

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

  • Antero Resources (AR): 0.34%
  • Rice Energy (RICE): -0.22%
  • WPX Energy (WPX): -0.82%

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

  • Rex Energy (REXX): -11.1%
  • Chesapeake Energy (CHK): -8.9%
  • EXCO Resources (XCO): -6.8%

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 the movement 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 July 11, 2016, natural gas rose 64.8%. Our basket of equally weighted upstream stocks fell 17.2% over the same period.

The fall in gas-weighted stocks compared to natural gas could be attributed to the recent downturn in oil prices. Here’s how some of the companies in the basket performed over this period.

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

  • EXCO Resources (XCO): 51.9%
  • Rice Energy (RICE): 12.4%
  • Contango Oil & Gas (MCF): 7.4%

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

  • Rex Energy (REXX): -82.9%
  • Chesapeake Energy (CHK): -63.2%
  • Comstock Resources (CRK): -58.2%
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