6.5 +0.14 (+2.2%) Sell

DFRG does a dead cat bounce, it's still too early to buy into it

13 min read

DEL FRISCO'S RESTAURANT GROUP, INC. ranked among the best performers today. It delivered +2.2% to close at 6.5. During the last week it delivered -3.27% and saw a maximum drawdown of -6.1% before bouncing back.

[Themes containing DFRG]

Buy-and-Hold investors in DFRG experienced a maximum drawdown of -30.72% over the last three months. It delivered -26.97% 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 +8.22%.


DFRG has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 9 Mar, 2016 to 7 Nov, 2018. Over the last 2 years 11 months and 10 days, DFRG underperformed the SP500 index on 53% days.

During the last three months DFRG was mostly loss making and delivered on average -0.42% per day. It's best return during this period (of +16.52%) was on Thursday, 6 Dec, 2018. While it's worst loss in the same period (of -10.43%) was on Monday, 5 Nov, 2018. The longest stort-term trend during this period was 5 losing days, which started on 17 Oct, 2018 and ended on 23 Oct, 2018. This bearish trend lost -14.27% of investor capital.

The last 12 months saw DFRG's investors making profits in 4 months and incurring losses in 8 months. DFRG was less consistent in delivering monthly returs than SP500 index. DFRG was also a more risky investment than SP500 index as it's worst month in the last year, Jul 2018, returned -31.87% compared to -7.28% returned by SP500 index in Oct 2018. DFRG had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -53.45%.

When I graduated, I promptly took a job in finance, making both my pre-med and poli-sci years essentially useless - or so I thought.
-- Yael Cohen

DFRG 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 DFRG's volatility from 26 Sep, 2018 to 2 Nov, 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 DFRG has significant positive skewness in it's return distribution. This indicates that investors can expect DFRG to recover from drawdowns quickly. Which makes DFRG 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 DFRG. Therefore, SP500 must receive a lower allocation than DFRG in your portfolio. SP500 index usually has shorter drawdown period than DFRG.

Based on your interest in DFRG you may find it interesting to know that AMRH, APRN and SBOT have all shown remarkable performance and qualify to be on every investor's watchlist.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{}} {{detail.trend}} 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter