Energy Fuels Local Stock Rally

The May-Investments Index of Western Colorado Stocks surged higher in September, gaining +6.6 percent as energy exploration and services stocks powered higher. The widely followed S&P 500 stock index rose +3.7 percent during the month (total return including dividends).


Arch Coal (ACI) ended the month at $22.13, up +27.8 percent from a month earlier. Arch Coal was up over 35% two weeks into the quarter, on mixed analyst reports. Doug May, President of May-Investments, noted that “An analyst at Brean Murray initiated the stock with a sell recommendation on September 8, but two days later Mad Money TV show host, James Cramer, said that Congress has bought into the clean coal story in spite of the fact that natural gas is a much better energy alternative.” The entire energy complex was very strong during the month.

Kroger (KR) led a lackluster retail food group lower, falling -4.4 percent during the month of September and was the worst performer in the index. “Kroger cut its forecast for 2009 as the stock market rally has not yet convinced shoppers to loosen up their purse strings,” May said.

Year-to-date, May-Investments Index of Western Colorado Stocks is up +20.6 percent through the end of the third quarter while the overall market has gained +19.3 percent over the same time period. The index focuses on large companies whose operations have a significant impact in the local economy, including major Mesa County employers such as Wal-Mart, Halliburton, Kroger (City Markets), StarTek, CRH (United Companies), and the Union Pacific Railroad.

Douglas B. May, CFA, is President of May-Investments, LLC and author of Investment Heresies.

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