7.36 -0.05 (-0.67%) Buy

BCOV investors herd to book profits while the going is good

13 min read

BRIGHTCOVE INC ranked among the worst performers today. It fell by -0.67% to close at 7.36. During the last week it increased by +4.69% and saw a maximum drawdown of -0.67% before bouncing back.

[Themes containing BCOV]

Buy-and-Hold investors in BCOV experienced a maximum drawdown of -17.26% over the last three months. It fell by -9.69% during this bearish 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 +5.48%.


BCOV has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 4 Oct, 2016 to 24 Jan, 2018. Over the last 2 years 11 months and 9 days, BCOV underperformed the SP500 index on 50% days. Which indicates that on days BCOV underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months BCOV was mostly loss making and delivered on average -0.15% per day. It's best return during this period (of +3.4%) was on Tuesday, 11 Dec, 2018. While it's worst loss in the same period (of -7.81%) was on Friday, 2 Nov, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +2.87%) started on 29 Oct, 2018 and went on till 1 Nov, 2018 while the bearish trend (which returned -4.88%) started on 9 Oct, 2018 and went on till 12 Oct, 2018.

During the last year BCOV had 6 profitable months and 6 loss making months. BCOV returned profits in fewer months than SP500 index. BCOV significantly outperformed SP500 index in Apr 2018, when it returned +39.86% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. BCOV had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy.
-- Warren Buffett

BCOV 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 BCOV's volatility from 27 Sep, 2018 to 7 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that BCOV has significant positive skewness in it's return distribution. This indicates that investors can expect BCOV to recover from drawdowns quickly. Which makes BCOV a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in BCOV), if you are evaluating BCOV as an investment candidate, then you should read about RBBN which has delivered similar performance and can help diversify your portfolio.

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