43.58 -0.63 (-1.45%) Sell

CAKE investors looking to preserve capital

13 min read

CHEESECAKE FACTORY INC was among the worst performers on Tuesday. It returned -1.45% to close at 43.58. It is currently trading -27% below it's 52 week high of 59.83.

[Themes containing CAKE]

CAKE is currently in a down trend. The current bearish signal has generated a profit of +14.65% for investors in the last three months.


CAKE has been underperforming the SP500 index in recent time, after having outperformed till 7 Dec, 2016. Over the last 2 years 11 months and 14 days, CAKE underperformed the SP500 index on 50% days. Which indicates that on days CAKE underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months CAKE was mostly loss making and delivered on average -0.32% per day. It's best return during this period (of +2.69%) was on Monday, 19 Nov, 2018. While it's worst loss in the same period (of -4.75%) was on Friday, 16 Nov, 2018. There was initially a bullish trend during this period which started on 1 Nov, 2018 and went on till 9 Nov, 2018. The bullish trend returned +7.97% to investors. This was followed by a bearish trend that started on 29 Nov, 2018 and ended on 11 Dec, 2018. This bearish trend lost -8.6% of investor capital.

On monthly basis, CAKE delivered losses in more months over the last year, than profits. CAKE delivered profits less regularly than SP500 index. CAKE significantly outperformed SP500 index in Apr 2018, when it returned +9.44% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CAKE 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 -17.94%. It is interesting to note that both CAKE and SP500 index significantly outperform during months when quarterly/annual results are announced.

"I'm involved in the stock market, which is fun and, sometimes, very painful.

CAKE 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 CAKE's volatility from 19 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that CAKE has significant positive skewness in it's return distribution. This indicates that investors can expect CAKE to recover from drawdowns quickly. Which makes CAKE 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 CAKE. Therefore, SP500 must receive a lower allocation than CAKE in your portfolio. CAKE usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in CAKE), KEYS is a small cap that deserves to be closely tracked for investment opportunities.

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