Below is the updated Oil and Gas Stock Index (XOI) for August 2018 and the performance of the respective fundamental categories.
The current level on the XOI is 1,487.99. The downside targets for the index are 1,242.80 and 1,067.21.The upside targets are:
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1,585.07
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1,726.22
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2,115.21
We believe that the current declining trend is a respite for the rapid increase that started in early February 2018.
Performance by Fundamental Categories
The December 2017 review of the XOI had a breakdown of index component stocks. The performance from December 27, 2017 to August 23, 2018 and is contrasted with the performance from the March 29, 2018 performance:
| high p/e | low p/e | high p/b | low p/b | high yield | low yield | |
| CVX | TOT | MPC | PTR | BP | PBR | |
| PTR | VLO | OXY | PBR | SUN | APC | |
| OXY | MPC | APC | HES | PTR | NBL | |
| 8/23/2018 | 1.93% | 20.62% | 15.83% | 13.21% | 6.63% | 6.57% |
| 3/29/2018 | -7.08% | 4.29% | 3.53% | 14.57% | -2.97% | 18.08% |
| March to August chg | 9.01% | 16.33% | 12.30% | -1.36% | 9.60% | -11.51% |
For the same stocks in the respective groups the percentage change, in all except one category, was stark. The group that changed the most was the low p/e stocks (+16.33%) while the high p/b ratio stocks (+12.30%) came in second, in terms of change. The stocks that significantly underperformed from March to August were the low yield stocks (losing –11.51%) which we had pegged to be the outperformers earlier in the year.
What do these preliminary numbers suggest? Above average returns are temporary. What are above average returns? The year-to-date (YTD) returns on the XOI index are currently at +9.74%. Below is a YTD chart of the low p/e stocks compared to the XOI.
