ATLANTICA YIELD PLC (FOREIGN)

19.42 -0.21 (-1.07%) Buy

Stop-loss on the minds of AY investors as it ranked worse than it's peers

13 min read

ATLANTICA YIELD PLC (Foreign) has destroyed investor wealth today. It lost -1.07% to close at 19.42. During the last week it lost -1.06% and saw a maximum drawdown of -1.8% before bouncing back.

[Themes containing AY]

Buy-and-Hold investors in AY experienced a maximum drawdown of -8.39% over the last three months. It lost -5.73% during this down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals.

Trend

AY has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, AY underperformed the SP500 index on 50% days. Which indicates that on days AY underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months AY was mostly loss making and delivered on average -0.08% per day. It's best return during this period (of +5.83%) was on Tuesday, 6 Nov, 2018. While it's worst loss in the same period (of -2.47%) was on Wednesday, 14 Nov, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 1 Nov, 2018. The bullish trend returned +1.85% to investors. This was followed by a bearish trend that started on 12 Nov, 2018 and ended on 15 Nov, 2018. This bearish trend lost -7.34% of investor capital.

AY had 5 profitable and 7 loss making months over the last year. During the last year, AY underperformed SP500 index on monthly return basis. AY was also a less risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -6.88% compared to -7.75% returned by SP500 index in Dec 2018. AY 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 AY and SP500 index significantly outperform during months when quarterly/annual results are announced.

The individual investor should act consistently as an investor and not as a speculator.
-- Ben Graham

AY 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 AY's volatility from 20 Sep, 2018 to 7 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

SP500 index has more chance of extreme outcomes than AY. Therefore, SP500 must receive a lower allocation than AY in your portfolio.

On a general note (since you are interested in AY), three instruments that are extremely volatile are IX, VIPS and IMTE. They must all be evaluated prudently and investors are better off avoiding them at the moment.

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