Which Natural Gas Stocks Have Outperformed?



Natural-gas-weighted stocks and natural gas

Between July 11 and July 18, 2016, an equally weighted basket of natural-gas-weighted stocks rose 3.0%. 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 0.74% rise in natural gas for the same period. The stock returns are adjusted for dividends.

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The best and the worst natural gas stocks

Below are the returns for the best-performing and worst-performing stocks from our basket of natural-gas-weighted stocks from July 11 to July 18, 2016.

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

  • Chesapeake Energy (CHK): 10.0%
  • EXCO Resources (XCO): 9.8%
  • Comstock Resources (CRK): 7.1%

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

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 2016 lows

On March 3, 2016, natural gas futures touched a 17-year low of $1.64. From March 3 to July 18, 2016, natural gas rose 66.0%. Our basket of equally weighted upstream stocks fell 11.6% over the same period.

The fall in gas-weighted stocks compared to natural gas could be attributed to the recent softness 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): 75.4%
  • Contango Oil & Gas (MCF): 18.5%
  • Rice Energy (RICE): 11.1%

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

  • Rex Energy (REXX): -80.3%
  • Chesapeake Energy (CHK): -58.0%
  • Comstock Resources (CRK): -54.1%

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