DARDEN RESTAURANTS INC

104.83 -4.36 (-4.16%) Sell

DRI is a falling knife, continues to bleed every investor trying to catch it

13 min read

DRI has destroyed investor wealth today. On a longer term basis, investors in DARDEN RESTAURANTS INC made -0.05% per day. Friday's performance of -4.16% was a significant underperformance compared to it's daily average.

[Themes containing DRI]

DRI showed a strong down trend over the last 3 months. During this period DRI returned -11.67% and saw a maximum drawdown of -12.96%. There were 2 short signals during this period that returned a cumulative of +3.11% to investors.

Trend

DRI has been underperforming the SP500 index in recent time, after having outperformed till 7 Sep, 2018. Over the last 2 years 11 months and 3 days, DRI outperformed the SP500 index on 54% days.

During the last three months DRI was mostly loss making and delivered on average -0.19% per day. It's best return during this period (of +4.05%) was on Tuesday, 6 Nov, 2018. While it's worst loss in the same period (of -4.16%) was on Friday, 7 Dec, 2018. There was initially a bearish trend during this period which started on 25 Sep, 2018 and went on till 2 Oct, 2018. The trend delivered -5.62% losses to investors. This was followed by a bullish trend that started on 2 Nov, 2018 and ended on 9 Nov, 2018. This bullish trend delivered +7.08% to investors.

On monthly basis, DRI delivered losses in more months over the last year, than profits. DRI delivered profits less regularly than SP500 index. DRI significantly outperformed SP500 index in Jun 2018, when it returned +22.48% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. DRI had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -11.84%. It is interesting to note that both DRI and SP500 index significantly outperform during months when quarterly/annual results are announced.

Success usually comes to those who are too busy to be looking for it.
-- Henry David Thoreau

DRI 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 DRI's volatility from 14 Sep, 2018 to 7 Dec, 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 DRI has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

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

On a general note (since you are interested in DRI), three instruments that deserve special mention are I, ECYT and HEAR. They have all outperformed the market and must be closely watched for investment opportunities.

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