FANHUA INC. (Foreign) was among the worst performers on Friday. It fell by -2.78% to close at 22.0. It is currently trading -40% below it's 52 week high of 36.83.
FANH is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for FANH's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -14.61%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to FANH.
FANH has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 2 May, 2017 to 14 Jun, 2018. Over the last 2 years 11 months and 10 days, FANH outperformed the SP500 index on 50% days. Which indicates that on days FANH outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.
During the last three months FANH delivered profits on 52% days. However, it still managed to end this period in a loss. It's best return during this period (of +9.04%) was on Wednesday, 21 Nov, 2018. While it's worst loss in the same period (of -10.53%) was on Wednesday, 14 Nov, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 17 Sep, 2018 and went on till 21 Sep, 2018. This bullish trend returned +9.86% to investors.
During the last year FANH had 5 profitable months and 7 loss making months. FANH returned profits in fewer months than SP500 index. FANH significantly outperformed SP500 index in Jan 2018, when it returned +31.7% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. FANH had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jun 2018 to Aug 2018) during which period it delivered -18.65%. It is interesting to note that both FANH and SP500 index significantly outperform during months when quarterly/annual results are announced.
I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
-- Warren Buffett
FANH 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 FANH's volatility from 11 Oct, 2018 to 21 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 FANH 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.
Based on your interest in FANH you may find it interesting to know that V is a large cap that has shown remarkable performance and deserves to be on every investors' watchlist.
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