23.15 -0.47 (-2.03%) Sell

Are you evaluating investing in CARS? Avoid as it delivered massive losses

13 min read

CARS.COM INC. delivered massive losses today. It lost -2.03% to close at 23.15. It's recent 5 day performance has been -0.08%, -6.56%, +6.12%, -0.33% and -1.4%.

[Themes containing CARS]

CARS showed a strong down trend over the last 3 months. During this period CARS lost -10.72% and saw a maximum drawdown of -16.15%. There were 3 short signals during this period that returned a cumulative of +3.76% to investors.


CARS has been underperforming the SP500 index in recent time, after having outperformed till 6 Jun, 2017. Over the last 1 year 6 months and 13 days, CARS underperformed the SP500 index on 50% days. Which indicates that on days CARS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

CARS returned losses on 56% days in the last three months. During this time, it delivered on average -0.16% per day. It delivered it's worst daily return of -6.56%, during this period, on Thursday, 13 Dec, 2018. There was initially a bullish trend during this period which started on 20 Sep, 2018 and went on till 25 Sep, 2018. The bullish trend returned +6.76% to investors. This was followed by a bearish trend that started on 8 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -9.29% of investor capital.

CARS had 5 profitable and 7 loss making months over the last year. During the last year, CARS underperformed SP500 index on monthly return basis. CARS significantly outperformed SP500 index in Jun 2018, when it returned +10.55% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. CARS 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 -13.13%. It is interesting to note that both CARS and SP500 index significantly outperform during months when quarterly/annual results are announced.

Invest like a bull, sit like a bear and watch like an eagle. (mantra for long term investing)
-- Vijay Kedia

CARS 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 CARS's volatility from 20 Sep, 2018 to 13 Dec, 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 CARS has significant positive skewness in it's return distribution. This indicates that investors can expect CARS to recover from drawdowns quickly. Which makes CARS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

CARS has more chance of extreme outcomes than the SP500 index. Therefore, CARS must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than CARS.

Based on your interest in CARS you may find it interesting to know that AMRH has shown remarkable performance and deserves to be on every investors' watchlist.

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