AXALTA COATING SYSTEMS LTD.

23.79 -0.79 (-3.33%) Sell

AXTA is a falling knife, continues to bleed every investor trying to catch it

13 min read

AXALTA COATING SYSTEMS LTD. is a falling knife that can bleed you if you catch it today. It lost -3.33% to close at 23.79. It's recent 5 day performance has been +0.49%, -4.71%, +2.68%, +1.58% and -0.56%.

[Themes containing AXTA]

AXTA is currently in a down trend. The current bearish signal has generated a profit of +17.51% for investors in the last three months.

Trend

AXTA has been underperforming the SP500 index in recent time, after having outperformed till 29 Nov, 2017. Over the last 2 years 11 months and 3 days, AXTA underperformed the SP500 index on 50% days. Which indicates that on days AXTA underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months AXTA was mostly loss making and delivered on average -0.3% per day. It's best return during this period (of +3.16%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -7.06%) was on Tuesday, 9 Oct, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 17 Sep, 2018. The bullish trend returned +0.58% to investors. This was followed by a bearish trend that started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -8.54% of investor capital.

AXTA had 5 profitable and 7 loss making months over the last year. During the last year, AXTA underperformed SP500 index on monthly return basis. AXTA was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -15.62% compared to -7.28% returned by SP500 index in Oct 2018. AXTA had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -5.89%. It is interesting to note that both AXTA and SP500 index significantly outperform during months when quarterly/annual results are announced.

All intelligent investing is value investing - acquiring more than you are paying for. You must value the business in order to value the stock .
-- Charles Thomas Munger

AXTA is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in AXTA's volatility from 18 Sep, 2018 to 29 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that AXTA 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 AXTA. Therefore, SP500 must receive a lower allocation than AXTA in your portfolio. SP500 index usually has shorter drawdown period than AXTA.

On a general note (since you are interested in AXTA), three instruments that deserve special mention are AYTU, DLPH and AMRH. They have all outperformed the market and must be closely watched for investment opportunities.

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