Treading water in the 3Q
Three months ago, shares of Resolute Energy Corp., a Denver oil and gas producer, cost $2.97 each — less then a latte. On Friday, they closed at $26.06, up a lucky 777 percent.
Resolute Energy was the best performing stock in the state during what was a fairly lackluster three months for Colorado equities as a group.
The Bloomberg Colorado index, a basket of 73 Colorado companies, rose a meager 0.94 percent. That lagged the Dow Jones industrial average, up 2.1 percent, the S&P 500’s 3.3 percent gain and the Nasdaq composite’s runaway 9.7 percent advance.
“Given the concerns about the upcoming elections, it was a bit of a surprise how strong the U.S. markets performed,” said Michael Gegen, a senior vice president with Robert W. Baird & Co. in Cherry Creek.
After a fairly flat July and August, volatility returned to the market with a vengeance in September, Gegen said. Sectors in favor fell out of favor, and even within the same industries, winners rose and losers sank.
Rising oil prices combined with better than expected output from wells in the Delaware Basin in Texas, the country’s hottest petroleum play, helped drive an eightfold increase in the value of Resolute shares, one of the top showings of any U.S. stock, according to Bloomberg.
Another Denver oil company, Magellan Petroleum, also had a stellar third quarter, rising 365.3 percent. The company by all counts was nearing death’s door and its shares about to be delisted. But a reverse merger with Tellurian Investments Inc., a
private company looking to build a liquefied natural gas terminal in Louisiana, sparked a revival of investor interest in the company.
Not all petroleum companies, however, found a way to escape the quicksand. Shares of Denver-based Bonanza Creek Energy dove 49.2 percent during the quarter, most of that coming in July, when the company said it was looking for a consultant to explore its options, in- cluding a bankruptcy filing.
Boulder pharmaceutical maker Clovis Oncology, whose stock has a roller coaster history, went way up in the third quarter — 162.8 percent.
Gold Resources Corp., a mining company based in Colorado Springs, managed a 106.7 percent gain during the third quarter, the fourth best showing. Another gold miner, Denver-based Vista Gold, however, was off 44.8 percent, the second worst.
Shares of Broomfield-based Noodles & Co. took the biggest hit of any Colorado stock during the quarter, dropping 51.3 percent. A disappointing earnings report in the second quarter was followed by the departure of long-time CEO Kevin Reddy.
Investors more generally are souring on fastcasual restaurant concepts, which have failed to live up to elevated expectations. Shares of Denver-based Chipotle Mexican Grill, however, managed to rise 5.15 percent, breaking a three-quarter long streak of price declines that started last year when customers were sickened by contaminated food and ill employees.