Don't buy ICUI now, it is a volatile investment
12 Dec, 201813 min read
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ICU MEDICAL INC delivered massive losses today. It returned -0.33% to close at 234.52. It's recent 5 day performance has been -0.04%, +1.49%, -2.65%, -0.26% and -3.57%.
ICUI showed a strong down trend over the last 3 months. During this period ICUI returned -17.09% and saw a maximum drawdown of -22.44%. There was a short signal during this period which returned +13.83%.
ICUI has been underperforming the SP500 index in recent time, after having outperformed till 14 Jun, 2018. Over the last 2 years 11 months and 8 days, ICUI outperformed the SP500 index on 53% days.
ICUI returned losses on 56% days in the last three months. During this time, it delivered on average -0.27% per day. It delivered it's worst daily return of -10.85%, during this period, on Friday, 9 Nov, 2018. There was initially a bearish trend during this period which started on 17 Sep, 2018 and went on till 21 Sep, 2018. The trend delivered -6.24% losses to investors. This was followed by a bullish trend that started on 24 Sep, 2018 and ended on 28 Sep, 2018. This bullish trend delivered +6.36% to investors.
On monthly basis, ICUI delivered profits in more months over the last year, than losses. ICUI delivered profits less regularly than SP500 index. ICUI significantly outperformed SP500 index in May 2018, when it returned +15.63% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ICUI and SP500 index, both had periods of 6 consecutive profitable months.
"Even though the quotes above come from some of the most intelligent people on Wall Street, the ideas behind them are both quite simple and insightful.
ICUI is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant fall in ICUI's volatility from 13 Sep, 2018 to 3 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that ICUI 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 ICUI. Therefore, SP500 must receive a lower allocation than ICUI in your portfolio. SP500 index usually has shorter drawdown period than ICUI.
On a general note (since you are interested in ICUI), three mid cap instruments that deserve special mention are TWTR, ABMD and SQ. They have all outperformed the market and must be closely watched for investment opportunities.
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