ENSTAR GROUP LTD significantly underperformed on Friday. It delivered -0.43% to close at 172.21. On a day when the overall market breadth was 35%, it closed higher than 12% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
ESGR showed a strong bearish trend over the last 3 months. During this period ESGR delivered -20.11% and saw a maximum drawdown of -21.2%. There were 2 short signals during this period that returned a cumulative of +14.0% to investors.
ESGR has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 25 Oct, 2017 to 3 Dec, 2018. Over the last 2 years 11 months and 10 days, ESGR underperformed the SP500 index on 48% days. Which indicates that on days ESGR underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
ESGR returned losses on 67% days in the last three months. During this time, it delivered on average -0.35% per day. It delivered it's worst daily return of -3.8%, during this period, on Friday, 9 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 10 Oct, 2018 and ended on 17 Oct, 2018. This bearish trend lost -6.6% of investor capital.
The last 12 months saw ESGR's investors making profits in 5 months and incurring losses in 7 months. ESGR was less consistent in delivering monthly returs than SP500 index. ESGR was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -11.55% compared to -7.28% returned by SP500 index in Oct 2018. ESGR had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -20.38%. It is interesting to note that both ESGR and SP500 index significantly outperform during months when quarterly/annual results are announced.
The challenge is not to pick the best investment. The challenge is to pick the right investment.
-- Don Connelly
ESGR 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 ESGR's volatility from 9 Oct, 2018 to 6 Dec, 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 ESGR 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.
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