Doubt in the minds of CACI investors as it destroyed investor wealth
11 Dec, 201813 min read
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CACI significantly underperformed today. On a longer term basis, investors in CACI INTERNATIONAL INC made +0.08% per day. Tuesday's performance of -0.09% was a underperformance compared to it's daily average.
Buy-and-Hold investors in CACI experienced a maximum drawdown of -19.78% over the last three months. It fell by -18.54% during this strong 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 +12.7%.
CACI has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 1 Feb, 2016 to 5 Sep, 2018. Over the last 2 years 11 months and 7 days, CACI outperformed the SP500 index on 53% days.
CACI returned losses on 60% days in the last three months. During this time, it delivered on average -0.32% per day. It delivered it's worst daily return of -4.45%, during this period, on Tuesday, 4 Dec, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +5.54%) started on 5 Nov, 2018 and went on till 8 Nov, 2018 while the bearish trend (which returned -5.6%) started on 17 Sep, 2018 and went on till 20 Sep, 2018.
During the last year CACI had 8 profitable months and 4 loss making months. Profitable number of months of CACI and SP500 index were the same. CACI significantly outperformed SP500 index in Aug 2018, when it returned +11.3% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CACI 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 +39.21%. It is interesting to note that both CACI and SP500 index significantly outperform during months when quarterly/annual results are announced.
Some people dream of success, while other people get up every morning and make it happen.
-- Wayne Huizenga
CACI 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 CACI's volatility from 13 Sep, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that CACI 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 CACI. Therefore, SP500 must receive a lower allocation than CACI in your portfolio. SP500 index usually has shorter drawdown period than CACI.
On a general note (since you are interested in CACI), two small cap instruments that deserve special mention are BURL and EHC. They have significantly outperformed the overall market.
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