2.59 -0.08 (-3.0%) Sell

GNC is a falling knife, continues to bleed every investor trying to catch it

13 min read

GNC HOLDINGS, INC. has destroyed investor wealth today. It returned -3.0% to close at 2.59. It's recent 5 day performance has been +0.38%, -2.56%, +2.63%, -0.75% and -3.25%.

[Themes containing GNC]

GNC is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +15.55% for investors.


GNC has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 9 days, GNC underperformed the SP500 index on 53% days.

During the last three months GNC was mostly loss making and delivered on average -0.53% per day. It's best return during this period (of +11.22%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -19.19%) was on Monday, 12 Nov, 2018. There was initially a bullish trend during this period which started on 21 Sep, 2018 and went on till 26 Sep, 2018. The bullish trend returned +14.24% to investors. This was followed by a bearish trend that started on 18 Oct, 2018 and ended on 26 Oct, 2018. This bearish trend lost -26.55% of investor capital.

On monthly basis, GNC delivered losses in more months over the last year, than profits. GNC delivered profits less regularly than SP500 index. GNC significantly outperformed SP500 index in Sep 2018, when it returned +33.55% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. GNC 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 -45.08%. It is interesting to note that both GNC and SP500 index significantly outperform during months when quarterly/annual results are announced.

Know what you own, and know why you own it.
-- Peter Lynch

GNC 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 fall in GNC's volatility from 17 Sep, 2018 to 3 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 GNC has significant negative skewness in it's return distribution. This indicates that GNC is very risky for short-term investment and can significantly underperform for long durations.

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

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

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