Don't buy BJRI now, it is an investor's nightmare
17 Dec, 201813 min read
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BJS RESTAURANTS INC was among the worst performers today. It lost -2.22% to close at 52.89. It's recent 5 day performance has been -0.81%, -0.29%, +1.73%, -4.09% and +2.41%.
BJRI showed a strong down trend over the last 3 months. During this period BJRI lost -28.19% and saw a maximum drawdown of -28.19%. There was a short signal during this period which returned +23.9%.
BJRI has been underperforming the SP500 index in recent time, after having outperformed till 7 Sep, 2018. Over the last 2 years 11 months and 10 days, BJRI underperformed the SP500 index on 50% days. Which indicates that on days BJRI underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
BJRI returned losses on 56% days in the last three months. During this time, it delivered on average -0.5% per day. It delivered it's worst daily return of -6.68%, during this period, on Friday, 16 Nov, 2018. There was initially a bullish trend during this period which started on 25 Sep, 2018 and went on till 28 Sep, 2018. The bullish trend returned +4.06% to investors. This was followed by a bearish trend that started on 15 Nov, 2018 and ended on 21 Nov, 2018. This bearish trend lost -11.15% of investor capital.
BJRI had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of BJRI and SP500 index were the same. BJRI significantly outperformed SP500 index in Apr 2018, when it returned +27.08% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. BJRI had a longer winning streak of profitable months than SP500 index. It went up in 8 straight months (from Jan 2018 to Aug 2018) during which period it delivered +79.2%. It is interesting to note that both BJRI and SP500 index significantly outperform during months when quarterly/annual results are announced.
When I graduated, I promptly took a job in finance, making both my pre-med and poli-sci years essentially useless - or so I thought.
-- Yael Cohen
BJRI 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 BJRI's volatility from 28 Sep, 2018 to 31 Oct, 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 BJRI has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
SP500 index has more chance of extreme outcomes than BJRI. Therefore, SP500 must receive a lower allocation than BJRI in your portfolio. SP500 index usually has shorter drawdown period than BJRI.
Based on your interest in BJRI you may find it interesting to know that CMPR has delivered similar performance as BJRI and can be considered as an alternative investment candidate (to BJRI).
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