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Continental Resources Posted Lackluster 2Q16 Results, so Why Did Its Stock Rise 5%?

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Stock performance

After Continental Resources’ (CLR) 2Q16 earnings release on August 3, its stock rose by ~4.7%. YoY (year-over-year), CLR has gained ~38%. In this part of the series, we’ll analyze the company’s stock performance with respect to movements in the broader industry and the broader market.

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Peer comparison

Anadarko Petroleum (APC) has seen its stock price decrease by ~31% on a YoY basis. As the graph above shows, Continental Resources’ performance has been driven mainly by WTI (West Texas Intermediate) crude oil prices (OIL) and natural gas prices (UNG). These have also been driving the broader industry ETF, the Energy Select Sector SPDR ETF (XLE).

From July 21 to August 4, Continental Resources’ stock was mostly underperforming the Energy Select Sector SPDR ETF (XLE). However, toward the end of the period, it ended up giving higher returns compared to XLE. Continental Resources’ stock decreased by ~1.4% during this period, while XLE fell by ~1.8%.

Continental Resources’ stock also gave higher returns compared to crude oil at the end of the period, though it underperformed the SPDR S&P 500 ETF (SPY), which decreased by 0.07% during this period.

The outperformer in the period under discussion was natural gas, which had increased by 5.3% at the end of the period. Continental Resources’ stock increased by ~5% on August 3, despite its lackluster 2Q16 earnings. So the 3% increase in crude oil prices on August 3 likely boosted CLR’s stock.

Now let’s discuss CLR’s implied volatility.

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