BEST BUY CO INC

58.09 -0.56 (-0.97%) Sell

Waiting to invest in BBY? Avoid at the moment as it was among the worst performers

13 min read

BBY was among the worst performers today. On a longer term basis, investors in BEST BUY CO INC made -0.08% per day. Tuesday's performance of -0.97% was a underperformance compared to it's daily average.

[Themes containing BBY]

BBY showed a strong bearish trend over the last 3 months. During this period BBY delivered -25.76% and saw a maximum drawdown of -27.96%. There was a short signal during this period which returned +20.59%.

Trend

BBY has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 14 Jan, 2016 to 23 Aug, 2018. Over the last 2 years 11 months and 7 days, BBY outperformed the SP500 index on 54% days.

During the last three months BBY was mostly loss making and delivered on average -0.44% per day. It's best return during this period (of +4.16%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -7.43%) was on Friday, 9 Nov, 2018. The longest stort-term trend during this period was 9 losing days, which started on 1 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -11.3% of investor capital.

The last 12 months saw BBY's investors making profits in 5 months and incurring losses in 7 months. BBY was less consistent in delivering monthly returs than SP500 index. BBY was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -11.2% compared to -7.28% returned by SP500 index in Oct 2018. BBY had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -29.45%. It is interesting to note that both BBY and SP500 index significantly outperform during months when quarterly/annual results are announced.

If you would be wealthy, think of saving as well as getting.
-- Benjamin Franklin

BBY 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 BBY's volatility from 12 Sep, 2018 to 21 Nov, 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 BBY has significant positive skewness in it's return distribution. This indicates that investors can expect BBY to recover from drawdowns quickly. Which makes BBY a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in BBY derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in BBY), two instruments that deserve special mention are I and HEAR. They have significantly outperformed the overall market this year.

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