24.61 -0.07 (-0.28%) Sell

Are you evaluating investing in FSCT? Avoid as it has destroyed investor wealth

13 min read

FORESCOUT TECHNOLOGIES, INC has destroyed investor wealth on Tuesday. It lost -0.28% to close at 24.61. It is currently trading -39% below it's 52 week high of 40.46.

[Themes containing FSCT]

FSCT showed a strong down trend over the last 3 months. During this period FSCT lost -35.42% and saw a maximum drawdown of -40.51%. There was a short signal during this period which returned +18.56%.


FSCT has been underperforming the SP500 index in recent time, after having outperformed till 25 Sep, 2018. Over the last 1 year and 2 months, FSCT underperformed the SP500 index on 47% days. Which indicates that on days FSCT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months FSCT was mostly loss making and delivered on average -0.64% per day. It's best return during this period (of +6.24%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -8.81%) was on Wednesday, 10 Oct, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -21.41% losses to investors. This was followed by a bullish trend that started on 28 Nov, 2018 and ended on 3 Dec, 2018. This bullish trend delivered +10.72% to investors.

FSCT had 5 profitable and 7 loss making months over the last year. During the last year, FSCT underperformed SP500 index on monthly return basis. FSCT was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -24.69% compared to -7.75% returned by SP500 index in Dec 2018. FSCT 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 -35.47%.

"Of course, it is a little bit disingenuous to hint that hard work is the only thing you need to achieve success.

FSCT is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in FSCT's volatility from 25 Sep, 2018 to 9 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that FSCT 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 FSCT. Therefore, SP500 must receive a lower allocation than FSCT in your portfolio. SP500 index usually has shorter drawdown period than FSCT.

On a general note (since you are interested in FSCT), two mid cap instruments that deserve special mention are RHT and EW. They have significantly outperformed the overall market.

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