AMERISOURCEBERGEN CORP was among the worst performers on Tuesday. It returned -1.28% to close at 82.48. On a day when the overall market breadth was 35%, it closed higher than 10% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.
ABC showed a down trend over the last 3 months. During this period ABC returned -4.01% and saw a maximum drawdown of -12.03%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ABC till volatility reduces and a clear trend emerges.
ABC has been underperforming the SP500 index in recent time, after having outperformed till 5 Jan, 2016. Over the last 2 years 11 months and 7 days, ABC underperformed the SP500 index on 49% days. Which indicates that on days ABC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months ABC was mostly loss making and delivered on average -0.05% per day. It's best return during this period (of +3.38%) was on Tuesday, 16 Oct, 2018. While it's worst loss in the same period (of -6.41%) was on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +5.96% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -7.56% of investor capital.
On monthly basis, ABC delivered profits and losses in equal number of months. ABC delivered profits less regularly than SP500 index. ABC significantly outperformed SP500 index in Aug 2018, when it returned +9.95% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ABC had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both ABC and SP500 index significantly outperform during months when quarterly/annual results are announced.
Buy when everyone else is selling and hold until everyone else is buying. That's not just a catchy slogan. It's the very essence of successful investing.
-- J. Paul Getty
ABC is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in ABC's volatility from 13 Sep, 2018 to 8 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that ABC has significant positive skewness in it's return distribution. This indicates that investors can expect ABC to recover from drawdowns quickly. Which makes ABC a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in ABC derivatives at this moment can consider 'Bear Put Spread' options strategy to receive better risk-adjusted returns.
Based on your interest in ABC you may find it interesting to know that V is a large cap that has shown remarkable performance and deserves to be on every investors' watchlist.
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