22.04 -0.69 (-3.12%) Sell

Waiting to invest in CFX? Avoid at the moment as it has destroyed investor wealth

13 min read

COLFAX CORP has destroyed investor wealth on Tuesday. It delivered -3.12% to close at 22.04 which is it's 52 week low, down -47% from it's 52 week high.

[Themes containing CFX]

CFX showed a strong bearish trend over the last 3 months. During this period CFX delivered -37.4% and saw a maximum drawdown of -39.65%. There was a short signal during this period which returned +33.11%.


CFX has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 3 Feb, 2017 to 11 Dec, 2018. One must note that CFX is currently at it's worst performance to the SP500 index which makes it a bad investment candidate. Over the last 2 years 11 months and 7 days, CFX underperformed the SP500 index on 48% days. Which indicates that on days CFX underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

CFX returned losses on 54% days in the last three months. During this time, it delivered on average -0.71% per day. It delivered it's worst daily return of -15.23%, during this period, on Monday, 19 Nov, 2018. The longest stort-term trend during this period was 7 losing days, which started on 17 Oct, 2018 and ended on 25 Oct, 2018. This bearish trend lost -18.19% of investor capital.

The last 12 months saw CFX's investors making profits in 7 months and incurring losses in 5 months. CFX was less consistent in delivering monthly returs than SP500 index. CFX was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -22.76% compared to -7.28% returned by SP500 index in Oct 2018. CFX had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both CFX and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.

CFX is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in CFX's volatility from 26 Sep, 2018 to 20 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 CFX has significant positive skewness in it's return distribution. This indicates that investors can expect CFX to recover from drawdowns quickly. Which makes CFX 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 CFX. Therefore, SP500 must receive a lower allocation than CFX in your portfolio. CFX usually has shorter drawdown period than the SP500 index.

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

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