BLUE BIRD CORP

18.08 -0.51 (-2.8%) Sell

BLBD is a falling knife, continues to bleed every investor trying to catch it

13 min read

BLUE BIRD CORP delivered massive losses on Friday. It lost -2.8% to close at 18.08. On a day when the overall market breadth was 35%, it closed higher than 78% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing BLBD]

Buy-and-Hold investors in BLBD experienced a maximum drawdown of -30.57% over the last three months. It lost -23.06% 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 +22.0%.

Trend

BLBD has been underperforming the SP500 index in recent time, after having outperformed till 17 Sep, 2018. Over the last 2 years 11 months and 3 days, BLBD outperformed the SP500 index on 53% days.

BLBD returned losses on 62% days in the last three months. During this time, it delivered on average -0.39% per day. It delivered it's best daily return of +9.25%, during this period, on Friday, 14 Sep, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 18 Sep, 2018. The bullish trend returned +11.54% to investors. This was followed by a bearish trend that started on 16 Oct, 2018 and ended on 29 Oct, 2018. This bearish trend lost -28.89% of investor capital.

BLBD had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of BLBD and SP500 index were the same. BLBD was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -23.26% compared to -7.28% returned by SP500 index in Oct 2018. BLBD had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

Here's my gift-giving rule: Respect your current financial situation.
-- Suze Orman

BLBD is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in BLBD's volatility from 25 Sep, 2018 to 17 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that BLBD 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 BLBD. Therefore, SP500 must receive a lower allocation than BLBD in your portfolio. SP500 index usually has shorter drawdown period than BLBD.

On a general note (since you are interested in BLBD), three small cap instruments that deserve special mention are ZBRA, HQY and AAXN. They have all outperformed the market and must be closely watched for investment opportunities.

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