100.04 -0.44 (-0.44%) Sell

FIVE investors take a massive hit

13 min read

FIVE BELOW, INC has destroyed investor wealth on Friday. It lost -0.44% to close at 100.04. It is currently trading +61% above it's 52 week low of 61.94 and is down only -25% from it's 52 week high.

[Themes containing FIVE]

Buy-and-Hold investors in FIVE experienced a maximum drawdown of -26.62% over the last three months. It lost -22.62% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +10.52%.


FIVE has been underperforming the SP500 index in recent time, after having outperformed till 11 Sep, 2018. Over the last 2 years 11 months and 10 days, FIVE outperformed the SP500 index on 53% days.

FIVE returned losses on 58% days in the last three months. During this time, it delivered on average -0.37% per day. It delivered it's worst daily return of -8.97%, during this period, on Tuesday, 20 Nov, 2018. There was initially a bullish trend during this period which started on 24 Sep, 2018 and went on till 28 Sep, 2018. The bullish trend returned +3.79% to investors. This was followed by a bearish trend that started on 15 Nov, 2018 and ended on 23 Nov, 2018. This bearish trend lost -17.24% of investor capital.

FIVE had 6 profitable and 6 loss making months over the last year. During the last year, FIVE underperformed SP500 index on monthly return basis. FIVE significantly outperformed SP500 index in Jun 2018, when it returned +38.18% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. FIVE had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -23.63%.

The difference between succeeding and failing is consistency.
-- Don Connelly

FIVE is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in FIVE's volatility from 18 Sep, 2018 to 7 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 FIVE 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 FIVE. Therefore, SP500 must receive a lower allocation than FIVE in your portfolio. SP500 index usually has shorter drawdown period than FIVE.

On a general note (since you are interested in FIVE), three small cap instruments that deserve special mention are AAXN, KEYS and EHC. They have all outperformed the market and must be closely watched for investment opportunities.

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