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5 Top-Performing Stocks in the Top ETF of Q2

Sweta Killa

First Trust ISE-Revere Natural Gas Index Fund FCG topped the list of the best-performing ETFs in the second quarter with impressive returns of 73%.

This is especially true as oil price made the greatest comeback in history after collapsing to below zero (to negative $40) on Apr 20 for the first time ever. The production cuts by major oil producers and an uptick in demand with easing lockdowns measures have led to a spike in oil price (read: 5 ETFs That Outshined During 100 Days of Coronavirus Pandemic).

Oil producers have started scaling back their production at record levels. The most-notable development comes from OPEC, the 14-nation organization, and its allies that have agreed to extend historic production cuts of 9 .7 million barrels per day (about 10% of global supply) by another month, through the end of July. Additionally, the stockpile is declining slowly, easing the storage crisis. On the other hand, demand for oil has been recovering across the world as pandemic-forced lockdowns have been lifted.

Let’s take a closer look at the fundamentals of FCG.

FCG in Focus

This fund offers exposure to U.S. stocks that derive a substantial portion of their revenues from the exploration and production of natural gas. It follows the ISE-REVERE Natural Gas Index and holds 34 stocks in its basket. The fund has amassed $80 million in its asset base while charging 60 bps in annual fees. Volume is good with 1.3 million shares exchanged per day on average. The product has a Zacks ETF Rank #3 (Hold) with High risk outlook.

Though most of the stocks in the fund’s portfolio delivered strong returns, some stocks more than doubled in the second quarter. Below we have highlighted those five best-performing stocks in the ETF with their respective positions in the basket:

Best-Performing Stocks of FCG

Ovintiv Inc. OVV: The company is engaged in the exploration, development, production and marketing of natural gas, oil and natural gas liquids. The stock has witnessed positive earnings estimate revision of $31 over the past 30 days for this year and its earnings are expected to decline 78.1%. It skyrocketed 278% in the second quarter and has a Zacks Rank #3 and Value Score of A. The stock holds the fourth spot in the fund’s basket with 4.2% of the total assets.

QEP Resources Inc. QEP: This is a leading independent energy company engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. It has seen negative earnings estimate revision of 3 cents over the past 30 days for this year. The stock has a Zacks Rank #2 (Buy) and Value Score of A. It makes up for 1% share and has soared 265% in the second quarter. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Antero Resources Corporation AR: It is one of the fast-growing natural gas producers in the United States. The stock surged about 228% in the second quarter and takes the thirteenth position in the fund’s basket, claiming 3.7% of the assets. The stock has seen positive earnings estimate of 15 cents in a month for this year and has an expected negative growth of 367%. It has a Zacks Rank #3 and Value Score of A.

Matador Resources Company MTDR: This company is among the leading oil and gas explorers in the shale and unconventional resources in the United States. It has jumped around 219% and occupies the sixteenth spot in the fund’s portfolio, making up for 3.3% share. The stock has witnessed positive earnings estimate revision of couple of cents and its earnings are expected to decline 110%. It carries a Zacks Rank #3 (read: Best Energy ETFs & Stocks of Q2).

Apache Corporation APA: This is one of the world's leading independent energy companies engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. The stock takes the nineteenth rank in the fund’s basket with 2.6% allocation. It has delivered robust returns of 217% in the second quarter. The stock has seen negative earnings estimate revision of 3 cents for this year. It carries a Zacks Rank #3.

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