BWXT is a falling knife, continues to bleed every investor trying to catch it
14 Dec, 201813 min read
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BWX TECHNOLOGIES, INC. was among the worst performers on Friday. It fell by -0.85% to close at 41.82. It is currently trading -41% below it's 52 week high of 70.94.
BWXT is currently in a bearish trend. The current bearish signal has generated a profit of +33.77% for investors in the last three months.
BWXT has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 12 Feb, 2016 to 20 Apr, 2018. Over the last 2 years 11 months and 10 days, BWXT outperformed the SP500 index on 53% days.
During the last three months BWXT was mostly loss making and delivered on average -0.58% per day. It's best return during this period (of +3.97%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -23.75%) was on Wednesday, 7 Nov, 2018. The longest stort-term trend during this period was 7 losing days, which started on 3 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -9.74% of investor capital.
During the last year BWXT had 5 profitable months and 7 loss making months. BWXT returned profits in fewer months than SP500 index. BWXT was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -22.65% compared to -7.28% returned by SP500 index in Oct 2018. BWXT had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -37.46%. It is interesting to note that both BWXT and SP500 index significantly outperform during months when quarterly/annual results are announced.
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BWXT 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 BWXT's volatility from 17 Sep, 2018 to 13 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 BWXT has significant positive skewness in it's return distribution. This indicates that investors can expect BWXT to recover from drawdowns quickly. Which makes BWXT 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 BWXT. Therefore, SP500 must receive a lower allocation than BWXT in your portfolio. BWXT usually has shorter drawdown period than the SP500 index.
Based on your interest in BWXT you may find it interesting to know that OPNT is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to OPNT or sufficiently diversifying your portfolio.
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