ARROW ELECTRONICS INC

71.96 +1.1 (+1.52%) Sell

ARW investors considering profit booking at current levels

13 min read

ARROW ELECTRONICS INC outperformed today. It surged by +1.52% to close at 71.96. It's recent 5 day performance has been -0.87%, -0.31%, -3.98%, -0.95% and -3.81%.

[Themes containing ARW]

ARW is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for ARW's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -5.68%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to ARW.

Trend

ARW has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 25 Jul, 2017 to 25 Oct, 2018. Over the last 2 years 11 months and 8 days, ARW outperformed the SP500 index on 55% days.

ARW returned losses on 56% days in the last three months. During this time, it delivered on average -0.08% per day. It delivered it's best daily return of +6.13%, during this period, on Friday, 2 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -9.1% of investor capital.

During the last year ARW had 7 profitable months and 5 loss making months. ARW returned profits in fewer months than SP500 index. ARW significantly outperformed SP500 index in Nov 2018, when it returned +13.68% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ARW had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both ARW and SP500 index significantly outperform during months when quarterly/annual results are announced.

Try not to become a man of success. Rather become a man of value.
-- Albert Einstein

ARW is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in ARW's volatility from 14 Sep, 2018 to 2 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 ARW has significant positive skewness in it's return distribution. This indicates that investors can expect ARW to recover from drawdowns quickly. Which makes ARW a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ARW you may find it interesting to know that BURL, AAXN and ZBRA are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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