ABCB investors looking to preserve capital
14 Dec, 201813 min read
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AMERIS BANCORP has destroyed investor wealth on Friday. It returned -2.3% to close at 34.02. On a day when the overall market breadth was 35%, it closed higher than 80% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
Buy-and-Hold investors in ABCB experienced a maximum drawdown of -30.78% over the last three months. It returned -28.0% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +25.32%.
ABCB has been underperforming the SP500 index in recent time, after having outperformed till 9 Mar, 2018. Over the last 2 years 11 months and 10 days, ABCB underperformed the SP500 index on 49% days. Which indicates that on days ABCB underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months ABCB was mostly loss making and delivered on average -0.5% per day. It's best return during this period (of +6.73%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -8.76%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 27 Sep, 2018. The trend delivered -8.09% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 2 Nov, 2018. This bullish trend delivered +4.66% to investors.
On monthly basis, ABCB delivered losses in more months over the last year, than profits. ABCB delivered profits less regularly than SP500 index. ABCB was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -20.57% compared to -7.28% returned by SP500 index in Oct 2018. ABCB had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -33.17%.
What we now call 'finance' is, I hold, an intellectual perversion of what began as warm human love.
-- Robert Graves
ABCB 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 ABCB's volatility from 19 Sep, 2018 to 25 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that ABCB has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
ABCB has more chance of extreme outcomes than the SP500 index. Therefore, ABCB must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than ABCB.
On a general note (since you are interested in ABCB), two instruments that have delivered similar performance as ABCB are STOR and CWBC. They are suitable as good alternative investment candidates that can diversify your portfolio.
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