JEC investors hurt by serious losses
14 Dec, 201813 min read
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JACOBS ENGINEERING GROUP INC is a falling knife that can bleed you if you catch it on Friday. It fell by -1.99% to close at 58.7. On a day when the overall market breadth was 35%, it closed higher than 14% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
JEC is currently in a bearish trend. Over the last three months 2 bearish signals have generated a profit of +6.34% for investors.
JEC has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 10 Feb, 2016 to 7 Nov, 2018. Over the last 2 years 11 months and 10 days, JEC outperformed the SP500 index on 49% days. Which indicates that on days JEC outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.
During the last three months JEC was mostly loss making and delivered on average -0.38% per day. It's best return during this period (of +6.82%) was on Monday, 22 Oct, 2018. While it's worst loss in the same period (of -10.8%) was on Tuesday, 20 Nov, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +1.8%) started on 28 Sep, 2018 and went on till 4 Oct, 2018 while the bearish trend (which returned -9.76%) started on 8 Nov, 2018 and went on till 14 Nov, 2018.
During the last year JEC had 6 profitable months and 6 loss making months. JEC returned profits in fewer months than SP500 index. JEC was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -12.54% compared to -7.28% returned by SP500 index in Oct 2018. JEC 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 JEC and SP500 index significantly outperform during months when quarterly/annual results are announced.
"Derivatives are financial weapons of mass destruction.
JEC 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 JEC's volatility from 2 Oct, 2018 to 20 Nov, 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 JEC 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 JEC. Therefore, SP500 must receive a lower allocation than JEC in your portfolio. SP500 index usually has shorter drawdown period than JEC.
Based on your interest in JEC you may find it interesting to know that IMTE and GNK are highly volatile and therefore risky. Investors should consider limiting their exposure to these instruments (because of their volatile nature).
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