ACORN INTERNATIONAL, INC. (FOREIGN)

26.936 +0.21 (+0.78%) Buy

ATV investors rewarded by market outperformance

13 min read

ACORN INTERNATIONAL, INC. (Foreign) outperformed on Thursday. It surged by +0.78% to close at 26.936. On a day when the overall market breadth was 35%, it closed higher than 95% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing ATV]

Buy-and-Hold investors in ATV experienced a maximum drawdown of -42.24% over the last three months. It surged by +34.68% during this strong bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +25.28%.

Trend

ATV has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 4 Apr, 2016 to 29 May, 2018. Over the last 2 years 11 months and 9 days, ATV outperformed the SP500 index on 51% days.

ATV was profitable on 57% days in the last three months. During this time, it delivered on average +0.66% per day. It delivered it's worst daily return of -28.04%, during this period, on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 21 Nov, 2018 and went on till 29 Nov, 2018. This bullish trend returned +14.4% to investors.

The last 12 months saw ATV's investors making profits in 7 months and incurring losses in 5 months. ATV was less consistent in delivering monthly returs than SP500 index. ATV was also a more risky investment than SP500 index as it's worst month in the last year, Jun 2018, returned -54.42% compared to -7.28% returned by SP500 index in Oct 2018. ATV had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -21.96%. It is interesting to note that both ATV and SP500 index significantly outperform during months when quarterly/annual results are announced.

"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.

ATV 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 fall in ATV's volatility from 14 Sep, 2018 to 2 Oct, 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 ATV 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 ATV. Therefore, SP500 must receive a lower allocation than ATV in your portfolio. SP500 index usually has shorter drawdown period than ATV.

On a general note (since you are interested in ATV), ~SMALLCAP has performed really well and deserves to be closely tracked for investment opportunities.

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