EXP does a dead cat bounce, it's still too early to buy into it
17 Dec, 201813 min read
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EAGLE MATERIALS INC ranked among the best performers today. It delivered +0.77% to close at 61.71. It's recent 5 day performance has been -0.05%, -5.56%, +0.67%, -2.45% and -1.21%.
EXP is currently in a bearish trend. The current bearish signal has generated a profit of +28.93% for investors in the last three months.
EXP has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 25 Jan, 2017 to 13 Dec, 2018. Over the last 2 years 11 months and 10 days, EXP underperformed the SP500 index on 50% days. Which indicates that on days EXP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months EXP was mostly loss making and delivered on average -0.51% per day. It's best return during this period (of +10.46%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -7.29%) was on Tuesday, 4 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 -15.38% of investor capital.
During the last year EXP had 2 profitable months and 10 loss making months. EXP returned profits in fewer months than SP500 index. EXP was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -16.11% compared to -7.28% returned by SP500 index in Oct 2018. EXP had a longer winning streak of losing months than SP500 index. It went down in 7 straight months (from Jun 2018 to Dec 2018) during which period it delivered -53.82%. It is interesting to note that both EXP and SP500 index significantly outperform during months when quarterly/annual results are announced.
The difference between succeeding and failing is consistency.
-- Don Connelly
EXP 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 EXP's volatility from 18 Sep, 2018 to 30 Oct, 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 EXP 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 EXP. Therefore, SP500 must receive a lower allocation than EXP in your portfolio. SP500 index usually has shorter drawdown period than EXP.
On a general note (since you are interested in EXP), PTC is a small cap that deserves to be closely tracked for investment opportunities.
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