103.84 -2.42 (-2.33%) Sell

Don't invest in GPN now, it is a high risk investment

13 min read

GLOBAL PAYMENTS INC is a falling knife that can bleed you if you catch it on Friday. It returned -2.33% to close at 103.84. On a day when the overall market breadth was 35%, it closed higher than 4% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing GPN]

GPN showed a strong down trend over the last 3 months. During this period GPN returned -17.31% and saw a maximum drawdown of -19.8%. There was a short signal during this period which returned +11.9%.


GPN has been underperforming the SP500 index in recent time, after having outperformed till 14 Sep, 2018. Over the last 2 years 11 months and 3 days, GPN outperformed the SP500 index on 53% days.

During the last three months GPN was mostly loss making and delivered on average -0.28% per day. It's best return during this period (of +4.72%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -5.17%) was on Tuesday, 4 Dec, 2018. There was initially a bullish trend during this period which started on 10 Sep, 2018 and went on till 14 Sep, 2018. The bullish trend returned +2.38% to investors. This was followed by a bearish trend that started on 1 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -12.02% of investor capital.

On monthly basis, GPN delivered profits in more months over the last year, than losses. GPN delivered profits less regularly than SP500 index. GPN significantly outperformed SP500 index in Jan 2018, when it returned +12.27% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. GPN had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both GPN and SP500 index significantly outperform during months when quarterly/annual results are announced.

The only limit to our realization of tomorrow will be our doubts of today.
-- Franklin D. Roosevelt

GPN 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 GPN's volatility from 27 Sep, 2018 to 31 Oct, 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 GPN 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 GPN. Therefore, SP500 must receive a lower allocation than GPN in your portfolio. SP500 index usually has shorter drawdown period than GPN.

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

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