40.78 +0.52 (+1.27%) Sell

Joy for GVA investors as it manages to marginally outperform broader market

13 min read

GRANITE CONSTRUCTION INC outperformed on Tuesday. It surged by +1.27% to close at 40.78. On a day when the overall market breadth was 34%, it closed higher than 16% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Themes containing GVA]

Buy-and-Hold investors in GVA experienced a maximum drawdown of -27.69% over the last three months. It delivered -10.51% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +15.64%.


GVA has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 23 Nov, 2016 to 18 Oct, 2018. Over the last 2 years 11 months and 14 days, GVA underperformed the SP500 index on 50% days. Which indicates that on days GVA underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

GVA returned losses on 58% days in the last three months. During this time, it delivered on average -0.13% per day. It delivered it's best daily return of +12.19%, during this period, on Wednesday, 7 Nov, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +18.34%) started on 25 Oct, 2018 and went on till 30 Oct, 2018 while the bearish trend (which returned -4.71%) started on 21 Sep, 2018 and went on till 26 Sep, 2018.

The last 12 months saw GVA's investors making profits in 5 months and incurring losses in 7 months. GVA was less consistent in delivering monthly returs than SP500 index. GVA was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -19.45% compared to -7.75% returned by SP500 index in Dec 2018. GVA had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both GVA and SP500 index significantly outperform during months when quarterly/annual results are announced.

As long as you're going to be thinking anyway, think big.
-- Donald Trump

GVA is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in GVA's volatility from 21 Sep, 2018 to 7 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 GVA 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 GVA. Therefore, SP500 must receive a lower allocation than GVA in your portfolio. SP500 index usually has shorter drawdown period than GVA.

Based on your interest in GVA you may find it interesting to know that AAXN and PTC are both small caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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