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%.


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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