AMWD investors hold onto their investments as it marginally outperforms
12 Dec, 201813 min read
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AMERICAN WOODMARK CORP outperformed the broader market on Wednesday. It increased by +2.68% to close at 59.4. It is currently trading -57% below it's 52 week high of 140.05.
Buy-and-Hold investors in AMWD experienced a maximum drawdown of -32.27% over the last three months. It fell by -28.9% during this strong bearish 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 +24.35%.
AMWD has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 22 Feb, 2018 to 9 Nov, 2018. Over the last 2 years 11 months and 8 days, AMWD underperformed the SP500 index on 49% days. Which indicates that on days AMWD underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months AMWD was mostly loss making and delivered on average -0.51% per day. It's best return during this period (of +6.44%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -6.28%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 7 losing days, which started on 4 Oct, 2018 and ended on 12 Oct, 2018. This bearish trend lost -14.06% of investor capital.
During the last year AMWD had 4 profitable months and 8 loss making months. AMWD returned profits in fewer months than SP500 index. AMWD significantly outperformed SP500 index in May 2018, when it returned +25.43% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. AMWD had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Feb 2018 to Apr 2018) during which period it delivered -40.38%.
Buy at the point of maximum pessimism; sell at the point of maximum optimism.
-- Sir John Templeton
AMWD 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 surge in AMWD's volatility from 14 Sep, 2018 to 29 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 AMWD 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.
SP500 index has more chance of extreme outcomes than AMWD. Therefore, SP500 must receive a lower allocation than AMWD in your portfolio. SP500 index usually has shorter drawdown period than AMWD.
Based on your interest in AMWD you may find it interesting to know that EHC, AAXN and BURL are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
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