19.35 -0.3 (-1.53%) Sell

Looking to invest in KBH? Avoid at the moment as it ranked among the worst performers

13 min read

KB HOME ranked among the worst performers on Monday. It fell by -1.53% to close at 19.35. On a day when the overall market breadth was 34%, it closed higher than 18% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing KBH]

KBH showed a strong bearish trend over the last 3 months. During this period KBH fell by -25.0% and saw a maximum drawdown of -31.74%. There was a short signal during this period which returned +25.0%.


KBH has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 7 Jan, 2016 to 11 Jan, 2018. Over the last 2 years 11 months and 10 days, KBH outperformed the SP500 index on 52% days.

KBH returned losses on 58% days in the last three months. During this time, it delivered on average -0.4% per day. It delivered it's worst daily return of -15.34%, during this period, on Thursday, 15 Nov, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 16 Nov, 2018 and went on till 28 Nov, 2018. This bullish trend returned +19.39% to investors.

During the last year KBH had 4 profitable months and 8 loss making months. KBH returned profits in fewer months than SP500 index. KBH was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -15.74% compared to -7.28% returned by SP500 index in Oct 2018. KBH and SP500 index, both had periods of 2 consecutive losing months.

Some people dream of success, while other people get up every morning and make it happen.
-- Wayne Huizenga

KBH 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 KBH's volatility from 19 Sep, 2018 to 16 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 KBH has significant positive skewness in it's return distribution. This indicates that investors can expect KBH to recover from drawdowns quickly. Which makes KBH a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than KBH. Therefore, SP500 must receive a lower allocation than KBH in your portfolio. SP500 index usually has shorter drawdown period than KBH.

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

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