61.59 +1.02 (+1.65%) Sell

FFIN does a dead cat bounce, it's still too early to buy into it

13 min read

FFIN outperformed today. On a longer term basis, investors in FIRST FINANCIAL BANKSHARES INC made -0.05% per day. Wednesday's performance of +1.65% was a outperformance compared to it's daily average.

[Themes containing FFIN]

FFIN showed a bullish trend over the last 3 months. During this period FFIN surged by +1.8% and saw a maximum drawdown of -11.7%. There were 2 long signals during this period that returned a cumulative of +0.4% to investors.


FFIN has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 2 Feb, 2016 to 19 Nov, 2018. Over the last 2 years 11 months and 8 days, FFIN outperformed the SP500 index on 53% days.

FFIN was profitable on 52% days in the last three months. During this time, it delivered on average +0.04% per day. It delivered it's worst daily return of -5.44%, during this period, on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 6 profitable days, which started on 1 Nov, 2018 and went on till 8 Nov, 2018. This bullish trend returned +7.98% to investors.

The last 12 months saw FFIN's investors making profits in 8 months and incurring losses in 4 months. During the last year, FFIN and SP500 index had the same number of profitable months. FFIN significantly outperformed SP500 index in Nov 2018, when it returned +11.07% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. FFIN had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both FFIN and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Investors must keep in mind that there's a difference between a good company and a good stock. After all, you can buy a good car but pay too much for it .

FFIN 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 FFIN's volatility from 20 Sep, 2018 to 19 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that FFIN has significant positive skewness in it's return distribution. This indicates that investors can expect FFIN to recover from drawdowns quickly. Which makes FFIN a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in FFIN you may find it interesting to know that ABMD, LULU and AMD are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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