37.89 -1.72 (-4.54%) Buy

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

13 min read

HDS was among the worst performers today. On a longer term basis, investors in HD SUPPLY HOLDINGS, INC. made +0.07% per day. Friday's performance of -4.54% was a significant underperformance compared to it's daily average.

[Themes containing HDS]

HDS showed a strong down trend over the last 3 months. During this period HDS returned -12.13% and saw a maximum drawdown of -16.83%. There was a short signal during this period which returned +8.28%.


HDS has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 3 days, HDS underperformed the SP500 index on 48% days. Which indicates that on days HDS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months HDS was mostly loss making and delivered on average -0.19% per day. It's best return during this period (of +2.45%) was on Friday, 12 Oct, 2018. While it's worst loss in the same period (of -4.54%) was on Friday, 7 Dec, 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 -11.6% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 7 Nov, 2018. This bullish trend delivered +6.98% to investors.

On monthly basis, HDS delivered profits in more months over the last year, than losses. HDS delivered profits less regularly than SP500 index. HDS was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -11.39% compared to -7.28% returned by SP500 index in Oct 2018. HDS and SP500 index, both had periods of 6 consecutive profitable months.

"Price is what you pay and value is what you get.

HDS 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 HDS's volatility from 26 Sep, 2018 to 7 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 HDS has significant positive skewness in it's return distribution. This indicates that investors can expect HDS to recover from drawdowns quickly. Which makes HDS 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 HDS. Therefore, SP500 must receive a lower allocation than HDS in your portfolio. HDS usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in HDS), three mid cap instruments that deserve special mention are LULU, SQ and AMD. They have all outperformed the market and must be closely watched for investment opportunities.

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