39.74 -0.65 (-1.63%) Sell

HI investors looking to exit as part of sectoral rotation

13 min read

HILLENBRAND, INC. was among the worst performers on Friday. It delivered -1.63% to close at 39.74 which is it's 52 week low, down -25% from it's 52 week high.

[Themes containing HI]

Buy-and-Hold investors in HI experienced a maximum drawdown of -25.12% over the last three months. It delivered -24.09% 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 +20.01%.


HI has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 4 Feb, 2016 to 2 Aug, 2018. Over the last 2 years 11 months and 10 days, HI outperformed the SP500 index on 51% days.

HI returned losses on 58% days in the last three months. During this time, it delivered on average -0.42% per day. It delivered it's worst daily return of -4.96%, during this period, on Tuesday, 4 Dec, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +4.98%) started on 1 Nov, 2018 and went on till 7 Nov, 2018 while the bearish trend (which returned -7.3%) started on 8 Nov, 2018 and went on till 14 Nov, 2018.

The last 12 months saw HI's investors making profits in 7 months and incurring losses in 5 months. HI was less consistent in delivering monthly returs than SP500 index. HI was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -10.31% compared to -7.28% returned by SP500 index in Oct 2018. HI had a longer winning streak of profitable months than SP500 index. It went up in 7 straight months (from Mar 2018 to Sep 2018) during which period it delivered +19.7%. It is interesting to note that both HI and SP500 index significantly outperform during months when quarterly/annual results are announced.

Not everything that can be counted counts, and not everything that counts can be counted.
-- Albert Einstein

HI is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in HI's volatility from 17 Sep, 2018 to 7 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 HI 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 HI. Therefore, SP500 must receive a lower allocation than HI in your portfolio. SP500 index usually has shorter drawdown period than HI.

Based on your interest in HI you may find it interesting to know that AMZN and CSCO are both large caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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