18.09 -0.42 (-2.32%) Sell

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

13 min read

HEARTLAND EXPRESS INC was among the worst performers on Friday. It lost -2.32% to close at 18.09. It is currently trading -23% below it's 52 week high of 23.7.

[Themes containing HTLD]

HTLD showed a strong down trend over the last 3 months. During this period HTLD lost -10.84% and saw a maximum drawdown of -12.86%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in HTLD till volatility reduces and a clear trend emerges.


HTLD has been underperforming the SP500 index in recent time, after having outperformed till 29 Sep, 2017. Over the last 2 years 11 months and 10 days, HTLD underperformed the SP500 index on 48% days. Which indicates that on days HTLD underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months HTLD was mostly loss making and delivered on average -0.16% per day. It's best return during this period (of +6.93%) was on Thursday, 18 Oct, 2018. While it's worst loss in the same period (of -5.68%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 19 Sep, 2018 and went on till 25 Sep, 2018. The trend delivered -2.93% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 2 Nov, 2018. This bullish trend delivered +5.62% to investors.

HTLD had 5 profitable and 7 loss making months over the last year. During the last year, HTLD underperformed SP500 index on monthly return basis. HTLD was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -13.97% compared to -7.28% returned by SP500 index in Oct 2018. HTLD had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jan 2018 to Apr 2018) during which period it delivered -26.94%. It is interesting to note that both HTLD and SP500 index significantly outperform during months when quarterly/annual results are announced.

Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.
-- Franklin D. Roosevelt

HTLD 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 HTLD's volatility from 28 Sep, 2018 to 13 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 HTLD 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 HTLD. Therefore, SP500 must receive a lower allocation than HTLD in your portfolio. SP500 index usually has shorter drawdown period than HTLD.

On a general note (since you are interested in HTLD), two small cap instruments that deserve special mention are PTC and AAXN. They have significantly outperformed the overall market.

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