ALLEGIANT TRAVEL CO

120.84 -4.63 (-3.83%) Buy

ALGT investors herd to book profits while the going is good

13 min read

ALLEGIANT TRAVEL CO is a falling knife that can bleed you if you catch it today. It fell by -3.83% to close at 120.84. It's recent 5 day performance has been +0.42%, -0.17%, -0.78%, -6.52% and +6.81%.

[Themes containing ALGT]

ALGT is currently in a bullish trend. Over the last three months Buy-and-Hold has been a better strategy (returning -1.56%) for ALGT's investors than trading long signals.

Trend

ALGT has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 29 Mar, 2016 to 2 Oct, 2018. Over the last 2 years 11 months and 9 days, ALGT underperformed the SP500 index on 49% days. Which indicates that on days ALGT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ALGT delivered losses on 53% days. However, it still managed to end this period in a profit. It's best return during this period (of +7.44%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -6.52%) was on Friday, 7 Dec, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +7.53%) started on 11 Oct, 2018 and went on till 17 Oct, 2018 while the bearish trend (which returned -7.04%) started on 4 Oct, 2018 and went on till 10 Oct, 2018.

During the last year ALGT had 5 profitable months and 7 loss making months. ALGT returned profits in fewer months than SP500 index. ALGT significantly outperformed SP500 index in Nov 2018, when it returned +17.76% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ALGT had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Apr 2018 to Jul 2018) during which period it delivered -31.61%.

"Everything is always feasible if you run a corporate finance exercise: you can always try to come out with a justification on how things could work. But the real issue is to say how do you translate that into practice.

ALGT is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant fall in ALGT's volatility from 14 Sep, 2018 to 27 Sep, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ALGT has significant positive skewness in it's return distribution. This indicates that investors can expect ALGT to recover from drawdowns quickly. Which makes ALGT a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than ALGT. Therefore, SP500 must receive a lower allocation than ALGT in your portfolio. ALGT usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in ALGT), ZBRA is a small cap that deserves to be closely tracked for investment opportunities.

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