DAKTRONICS INC

8.25 -0.11 (-1.32%) Buy

Stop-loss on the minds of DAKT investors as it performed worse than the broader market

13 min read

DAKTRONICS INC delivered massive losses on Friday. It returned -1.32% to close at 8.25. On a day when the overall market breadth was 35%, it closed higher than 72% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing DAKT]

Buy-and-Hold investors in DAKT experienced a maximum drawdown of -10.1% over the last three months. It grew by +5.36% during this up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +5.78%.

Trend

DAKT has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 3 days, DAKT underperformed the SP500 index on 49% days. Which indicates that on days DAKT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months DAKT delivered losses on 56% days. However, it still managed to end this period in a profit. It's best return during this period (of +11.46%) was on Wednesday, 21 Nov, 2018. While it's worst loss in the same period (of -5.1%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 1 Oct, 2018 and went on till 5 Oct, 2018. The trend delivered -6.4% losses to investors. This was followed by a bullish trend that started on 15 Nov, 2018 and ended on 23 Nov, 2018. This bullish trend delivered +17.65% to investors.

On monthly basis, DAKT delivered losses in more months over the last year, than profits. DAKT delivered profits less regularly than SP500 index. DAKT significantly outperformed SP500 index in Nov 2018, when it returned +22.44% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. DAKT had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jul 2018 to Oct 2018) during which period it delivered -14.87%. It is interesting to note that both DAKT and SP500 index significantly outperform during months when quarterly/annual results are announced.

A stock broker is one who invests other people's money until its all gone.
-- Woody Allen

DAKT 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 DAKT's volatility from 17 Sep, 2018 to 26 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

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

On a general note (since you are interested in DAKT), if you are evaluating DAKT as an investment candidate, then you should read about WMB which has delivered similar performance and can help diversify your portfolio.

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