Mag­el­lan Petroleum was 1 of 3 gush­ers in mar­kets

The Denver Post - - BUSINESS - By Aldo Svaldi

U.S. stock mar­kets got off to a mis­er­able start in 2016, were plagued with dis­ap­point­ing earn­ings and were blind­sided in ways that should have sent them spi­ral­ing lower still.

Yet, they found a way to shake it off and end the year with solid gains, a pat­tern fol­lowed by an in­dex track­ing Colorado stocks. A few Colorado stocks made dra­matic turn­arounds.

“There is a lot of money out there still, cour­tesy of the cen­tral banks and a psy­cho­log­i­cal at­ti­tude that there is no al­ter­na­tive to stocks,” said An­dre Ratkai, chief in­vest­ment of­fi­cer with the Praxis Ad­vi­sory Group in Green­wood Vil­lage.

The Bloomberg Colorado in­dex, a bas­ket of 72 stocks based in the state, rose 4 per­cent over the course of the year. That lagged the Dow Jones in­dus­trial av­er­age, up 13.4 per­cent; the S&P 500, up 9.5 per­cent; and the Nas­daq com­pos­ite, up 7.5 per­cent.

Ratkai said some of the events that could have de­railed the mar­ket but didn’t in­cluded Bri­tain’s vote to leave the Euro­pean Union, Don­ald Trump’s un­ex­pected pres­i­den­tial win, and a sharp rise in in­ter­est rates at year’s end.

The state’s top per­form­ing stock in 2016 was Mag­el­lan Petroleum, a Den­ver-based oil and gas firm left for dead. Mag­el­lan shares, which could be had at the end of last year for 54.8 cents, ended trad­ing Fri­day at $11.25, a gain of 1,948 per­cent.

Mag­el­lan shares started track­ing the re­bound in oil prices early in the year, but found a new lease on life when a new Hous­ton firm, Tel­lurian In­vest­ments, pro­posed a merger.

Tel­lurian is de­vel­op­ing nat­u­ral gas liq­ue­fac­tion fa­cil­i­ties along the Gulf Coast. Mag­el­lan shares received an­other big boost Dec. 20, when French petroleum giant To­tal said it would buy a 23 per­cent stake in Tel­lurian.

An in­vestor with a strong enough stom­ach to put $10,000 into Mag­el­lan a year ago would now be hold­ing shares worth $204,545.

Shares of Res­o­lute En­ergy, a Den­ver oil and gas ex­plo­ration com­pany, also had a big year, ris­ing 846.9 per­cent after what in­vestors per­ceived were some smart moves in the Per­mian Basin in Texas, con­sid­ered the coun­try’s hottest drilling plays right now.

West­more­land Coal was an­other Colorado com­pany on the outs that man­aged to stage a big re­bound. Its shares rose 200.5 per­cent.

One com­pany that couldn’t just “shake it off ” was Chipo­tle Mex­i­can Grill, which ended the year down 21.4 per­cent de­spite var­i­ous ef­forts to re­store its rep­u­ta­tion and win back cus­tomers fol­low­ing food con­tam­i­na­tion prob­lems in late 2015.

The state’s worst per­form­ing stock last year was Louisville-based Real Goods So­lar, a so­lar-panel provider whose story pro­vides a cau­tion against blindly in­vest­ing in the big losers from the pre­vi­ous year.

Real Goods shares dropped 98.1 per­cent in 2016, after a 93.5 per­cent de­cline in 2015, which fol­lowed an 84 per­cent drop in 2014.

And not all petroleum com­pa­nies tracked with the en­ergy re­bound that fol­lowed a dou­bling of oil prices since Jan­uary. Shares of Den­ver-based Bo­nanza Creek En­ergy were down 80.7 per­cent in 2016. They took a big hit right be­fore Christ­mas after the com­pany said it had reached a deal with cred­i­tors to wipe out $850 mil­lion in debt in re­turn for giv­ing them 95.5 per­cent of the eq­uity in the re­struc­tured com­pany.

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