FORTERRA, INC.

4.81 -0.37 (-7.68%) Buy

FRTA investors herd to book profits while the going is good

13 min read

FRTA is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in FORTERRA, INC. made +0.34% per day. Tuesday's performance of -7.68% was a significant underperformance compared to it's daily average.

[Themes containing FRTA]

FRTA showed a strong down trend over the last 3 months. During this period FRTA returned -40.84% and saw a maximum drawdown of -47.08%. There was a short signal during this period which returned +26.01%.

Trend

FRTA has been outperforming the SP500 index in recent time. Over the last 2 years and 2 months, FRTA underperformed the SP500 index on 52% days.

FRTA returned losses on 63% days in the last three months. During this time, it delivered on average -0.72% per day. It delivered it's best daily return of +13.71%, during this period, on Tuesday, 6 Nov, 2018. There was initially a bullish trend during this period which started on 27 Sep, 2018 and went on till 3 Oct, 2018. The bullish trend returned +1.9% to investors. This was followed by a bearish trend that started on 14 Nov, 2018 and ended on 21 Nov, 2018. This bearish trend lost -15.08% of investor capital.

On monthly basis, FRTA delivered losses in more months over the last year, than profits. FRTA delivered profits less regularly than SP500 index. FRTA was also a more risky investment than SP500 index as it's worst month in the last year, Jan 2018, returned -40.39% compared to -7.28% returned by SP500 index in Oct 2018. FRTA had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jul 2018 to Oct 2018) during which period it delivered -62.69%.

"In this world nothing can be said to be certain, except death and taxes.

FRTA 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 FRTA's volatility from 8 Oct, 2018 to 11 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 FRTA has positive skewness in it's return distribution. This indicates that investors can expect FRTA to make attempts to recover from drawdowns quickly. Which makes FRTA a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

Based on your interest in FRTA you may find it interesting to know that IMTE is highly volatile and investors investing in it must take extreme caution. Consider either reducing your exposure to IMTE or sufficiently diversifying your portfolio.

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