ALKERMES PLC.

32.95 +0.13 (+0.4%) Sell

ALKS does a dead cat bounce, it's still too early to buy into it

14 min read

ALKERMES PLC. was among the best performers on Monday. It returned +0.4% to close at 32.95. On a day when the overall market breadth was 34%, it closed higher than 16% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing ALKS]

ALKS showed a strong down trend over the last 3 months. During this period ALKS returned -16.75% and saw a maximum drawdown of -26.43%. There was a short signal during this period which returned +16.75%.

Trend

ALKS has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, ALKS underperformed the SP500 index on 50% days. Which indicates that on days ALKS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months ALKS was mostly loss making and delivered on average -0.27% per day. It's best return during this period (of +4.3%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -7.88%) was on Monday, 12 Nov, 2018. There was initially a bullish trend during this period which started on 19 Sep, 2018 and went on till 25 Sep, 2018. The bullish trend returned +7.66% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -16.35% of investor capital.

On monthly basis, ALKS delivered losses in more months over the last year, than profits. ALKS delivered profits less regularly than SP500 index. ALKS was also a more risky investment than SP500 index as it's worst month in the last year, Jun 2018, returned -12.8% compared to -7.28% returned by SP500 index in Oct 2018. ALKS 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 -30.88%. It is interesting to note that both ALKS and SP500 index significantly outperform during months when quarterly/annual results are announced.

"There are two kinds of investors, be they large or small: those who don't know where the market is headed, and those who don't know that they don't know. Then again, there is a third type of investor -the investment professional, who indeed knows that he or she doesn't know, but whose livelihood depends upon appearing to know.

ALKS is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in ALKS's volatility from 25 Sep, 2018 to 2 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ALKS has significant positive skewness in it's return distribution. This indicates that investors can expect ALKS to recover from drawdowns quickly. Which makes ALKS 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 ALKS. Therefore, SP500 must receive a lower allocation than ALKS in your portfolio. ALKS usually has shorter drawdown period than the SP500 index.

Based on your interest in ALKS you may find it interesting to know that NVCN and IX are highly volatile and therefore risky. Investors should consider limiting their exposure to these instruments (because of their volatile nature).

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