QVP beat the market yet again in April, now making it the third consecutive month for QVP to do so. Managing to build upon our strong momentum so far in 2016, QVP posted a return of 0.70% for April, ahead of the 0.27% growth seen by the S&P 500 for the month.
One of the reasons that it is reassuring for us to see the market showing positive growth is that since QVP’s inception in 2005, our large-cap value strategy has outperformed the S&P 500 59.26% of all monthly periods when the market has seen positive returns.
A third of the way through 2016 and QVP is currently up 4.37% percent for the year, in comparison to 1.05% by the S&P 500. Our strategy continues to outperform the market on a long-term consistent basis and offer excellent value to client portfolios, as illustrated in the table below:
Lifetime performance of QVP compared to our two benchmarks.
Listed below are the top five performing stocks in April for our QVP strategy:
5. ONEOK (OKE) +23.11%
Despite the success of the energy company’s stock during April, the month was relatively quiet on the news front. A quarterly dividend was announced though of 61.5 cents per share, effective for the first quarter 2016. The dividend is payable on May 13th to shareholders of record at the close of business May 2nd.
They will report their first quarter results of 2016 on May 3rd at the end of trading.
4. Encana (ECA) +25.78%
Another energy company to follow, Encana benefitted from the surge in crude oil price during April (as illustrated in the chart below). A quiet month for Encana as well, although will have been heartened by the Colorado Supreme Court ruling that municipalities cannot bar fracking operations.
Encana will also report their first quarter results of 2016 on May 3rd.
Brent Crude Oil Spot Price change over April.
3. Murphy Oil (MUR) +41.88%
Another energy company buoyed by the oil rally last month, Murphy Oil saw tremendous growth despite announcing earlier in April that they would be cutting jobs throughout their locations. Analysts have been favorably revising their earnings estimates for the firm over the past month.
Murphy Oil will report their first quarter results of 2016 on May 4th.
2. Chesapeake Energy (CHK) +66.75%
The next energy company to benefit from the oil rally last month, Chesapeake stock skyrocketed by nearly 30% upon the announcement that they were sticking to their $4 billion borrowing limit.
The company had to pledge additional assets as collateral but being able to maintain its borrowing limit is significant at a time when most oil and gas producers are bracing for steep cuts to their credit lines.
1. Energy Transfer Equity (ETE) +74.33%
And it should be no surprise at this point to see that the top earner for QVP in April was another energy company: Energy Transfer Equity.
Williams Companies, a one-time merger partner of ETE, filed suit against the pipeline and infrastructure company over its private offering of convertible preferred units, contending it breached their merger agreement, causing the stock prices of both companies to rise.
Williams said it sued Energy Transfer to protect the interests of its stockholders, adding the litigation will ensure Williams' stockholders will receive the consideration to which they are entitled under the merger agreement.
The firm also announced a quarterly cash distribution of $0.285 per common unit for the first quarter of this year. Adjusting for the unit split completed in July of last year, the quarterly distribution represents a payout increase of 16% from a year ago, and the same level as last quarter.
QVP's top performers for April.
So another successful month for QVP, driven by the energy sector, and it will be interesting to see how things unfold throughout May as companies announce the results of their first quarter of 2016.
Get in touch if you’d like to learn more about our QVP strategy and our work here at Kruse Asset Management.