The C Three Composite Index did not make it into positive territory in November, although it managed to stay under a 2 percent loss for the month. Falling oil prices continue to drag natural gas prices down. Companies with natural gas price exposure generally were hit hard again in November. Fundamentals will have to come into play at some point. Rig counts are dropping; production is decreasing. Even with a declining economy, a cold winter could raise demand. With prices down more than 50 percent since July, the bottom should be near.
The beleaguered merchant generation group continues to have a firm grip on the bottom performance for the month and year. Reliant is down almost 80 percent year-to-date. AES is down almost 65 percent. The year-to-date losers are dominated by merchant generation players. C Three’s Less Regulated Electric Index is down almost 40 percent since Jan. 1, 2008. Natural gas distribution companies without much price exposure continue to lead the indices since July. The Regulated Electric Index actually showed a positive gain for November. The Less Regulated Electric group managed to flatten its losses.
While the S&P 500 has given up all of its five-year gains, even the Less Regulated Electric Index has outperformed the S&P. The C Three Group’s equity indices have been able to stay in positive territory for the past five years and have outperformed the S&P 500.