32.85 0.0 (0.0%) Sell

Don't consider investing in GIII now, it is risky at the moment

13 min read

G III APPAREL GROUP LTD trailed the broader market on Friday. It returned 0.0% to close at 32.85. On a day when the overall market breadth was 35%, it closed higher than 15% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing GIII]

GIII showed a strong down trend over the last 3 months. During this period GIII returned -26.21% and saw a maximum drawdown of -31.83%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in GIII till volatility reduces and a clear trend emerges.


GIII has been underperforming the SP500 index in recent time, after having outperformed till 1 Mar, 2016. Over the last 2 years 11 months and 3 days, GIII underperformed the SP500 index on 48% days. Which indicates that on days GIII underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months GIII delivered profits on 53% days. However, it still managed to end this period in a loss. It's best return during this period (of +9.01%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -14.35%) was on Thursday, 6 Dec, 2018. There was initially a bullish trend during this period which started on 10 Sep, 2018 and went on till 13 Sep, 2018. The bullish trend returned +7.12% to investors. This was followed by a bearish trend that started on 9 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -9.32% of investor capital.

On monthly basis, GIII delivered profits in more months over the last year, than losses. GIII delivered profits less regularly than SP500 index. GIII was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -18.04% compared to -7.28% returned by SP500 index in Oct 2018. GIII had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

Opportunity is missed by most people because it is dressed in overalls and looks like work.
-- Thomas Edison

GIII 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 GIII's volatility from 20 Sep, 2018 to 4 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

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

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

On a general note (since you are interested in GIII), AMD is a mid cap that deserves to be closely tracked for investment opportunities.

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