33.35 -0.1 (-0.3%) Sell

Doubt in the minds of DKS investors as it delivered massive losses

13 min read

DICKS SPORTING GOODS INC significantly underperformed on Tuesday. It fell by -0.3% to close at 33.35. It is currently trading -15% below it's 52 week high of 39.43.

[Themes containing DKS]

Buy-and-Hold investors in DKS experienced a maximum drawdown of -13.85% over the last three months. It fell by -10.76% 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.


DKS has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 21 Sep, 2016 to 7 Nov, 2017. Over the last 2 years 11 months and 14 days, DKS underperformed the SP500 index on 49% days. Which indicates that on days DKS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

DKS returned losses on 54% days in the last three months. During this time, it delivered on average -0.15% per day. It delivered it's best daily return of +6.82%, during this period, on Tuesday, 30 Oct, 2018. The longest stort-term trend during this period was 8 losing days, which started on 26 Sep, 2018 and ended on 5 Oct, 2018. This bearish trend lost -10.09% of investor capital.

During the last year DKS had 7 profitable months and 5 loss making months. DKS returned profits in fewer months than SP500 index. DKS significantly outperformed SP500 index in May 2018, when it returned +10.61% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. DKS had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.
-- Johann Wolfgang von Goethe

DKS is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in DKS's volatility from 19 Sep, 2018 to 29 Nov, 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 DKS has significant positive skewness in it's return distribution. This indicates that investors can expect DKS to recover from drawdowns quickly. Which makes DKS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in DKS derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in DKS you may find it interesting to know that PTC is a small cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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