ENERGY RECOVERY, INC.

7.3 -0.32 (-4.45%) Sell

Prayers for ERII investors as it significantly underperforms

13 min read

ENERGY RECOVERY, INC. has destroyed investor wealth on Friday. It delivered -4.45% to close at 7.3. On a day when the overall market breadth was 35%, it closed higher than 67% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing ERII]

ERII is currently in a bearish trend. Over the last three months 2 bearish signals have generated a profit of +4.91% for investors.

Trend

ERII has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 27 Sep, 2016 to 5 Mar, 2018. Over the last 2 years 11 months and 10 days, ERII underperformed the SP500 index on 51% days.

During the last three months ERII was mostly loss making and delivered on average -0.27% per day. It's best return during this period (of +18.15%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -5.61%) was on Monday, 10 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -11.95% of investor capital.

The last 12 months saw ERII's investors making profits in 5 months and incurring losses in 7 months. ERII was less consistent in delivering monthly returs than SP500 index. ERII significantly outperformed SP500 index in Mar 2018, when it returned +19.83% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ERII had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year.

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ERII 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 ERII's volatility from 26 Sep, 2018 to 6 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 ERII 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 ERII. Therefore, SP500 must receive a lower allocation than ERII in your portfolio. SP500 index usually has shorter drawdown period than ERII.

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

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