JKHY investors looking to exit as part of sectoral rotation
17 Dec, 201813 min read
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HENRY JACK & ASSOCIATES INC is a falling knife that can bleed you if you catch it on Monday. It delivered -1.99% to close at 128.75. On a day when the overall market breadth was 34%, it closed higher than 5% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
JKHY is currently in a bearish trend. The current bearish signal has generated a profit of +16.57% for investors in the last three months.
JKHY has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 27 Oct, 2016 to 14 Sep, 2018. Over the last 2 years 11 months and 10 days, JKHY outperformed the SP500 index on 55% days.
During the last three months JKHY was mostly loss making and delivered on average -0.33% per day. It's best return during this period (of +3.48%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -4.18%) was on Wednesday, 10 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 7 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -10.39% of investor capital.
The last 12 months saw JKHY's investors making profits in 8 months and incurring losses in 4 months. During the last year, JKHY and SP500 index had the same number of profitable months. JKHY significantly outperformed SP500 index in Aug 2018, when it returned +17.62% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. JKHY 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 +33.92%.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.
JKHY 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 JKHY's volatility from 24 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that JKHY 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 JKHY. Therefore, SP500 must receive a lower allocation than JKHY in your portfolio. SP500 index usually has shorter drawdown period than JKHY.
On a general note (since you are interested in JKHY), MSFT is a large cap that deserves to be closely tracked for investment opportunities.
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