BASIC ENERGY SERVICES INC

5.06 -0.16 (-3.07%) Sell

Stop-loss on the minds of BAS investors as it significantly underperforms

13 min read

BAS was among the worst performers today. On a longer term basis, investors in BASIC ENERGY SERVICES INC made +0.89% per day. Thursday's performance of -3.07% was a significant underperformance compared to it's daily average.

[Themes containing BAS]

Buy-and-Hold investors in BAS experienced a maximum drawdown of -57.69% over the last three months. It lost -44.03% during this strong 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. The net profit from Short signals was +4.82%.

Trend

BAS has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 9 days, BAS underperformed the SP500 index on 53% days.

BAS returned losses on 62% days in the last three months. During this time, it delivered on average -0.82% per day. It delivered it's best daily return of +10.82%, during this period, on Tuesday, 25 Sep, 2018. There was initially a bearish trend during this period which started on 17 Oct, 2018 and went on till 24 Oct, 2018. The trend delivered -25.59% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 5 Nov, 2018. This bullish trend delivered +13.52% to investors.

BAS had 3 profitable and 9 loss making months over the last year. During the last year, BAS underperformed SP500 index on monthly return basis. BAS was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -22.76% compared to -7.28% returned by SP500 index in Oct 2018. BAS 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 -48.34%. It is interesting to note that both BAS and SP500 index significantly outperform during months when quarterly/annual results are announced.

Be quick in cutting your loses but not profits
-- Abhishek Shukla

BAS is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in BAS's volatility from 21 Sep, 2018 to 10 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 BAS has significant negative skewness in it's return distribution. This indicates that BAS is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in BAS you may find it interesting to know that PRQR has shown remarkable performance this year and deserves to be on every investors' watchlist.

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