15.99 -0.61 (-3.79%) Sell

Don't buy KBR now, it is an investor's nightmare

13 min read

KBR, INC. is a falling knife that can bleed you if you catch it on Friday. It lost -3.79% to close at 15.99. It is currently trading -27% below it's 52 week high of 21.91.

[Themes containing KBR]

KBR showed a strong down trend over the last 3 months. During this period KBR lost -19.28% and saw a maximum drawdown of -27.02%. There was a short signal during this period which returned +13.05%.


KBR has been underperforming the SP500 index in recent time, after having outperformed till 4 Jan, 2016. Over the last 2 years 11 months and 10 days, KBR underperformed the SP500 index on 49% days. Which indicates that on days KBR underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

KBR returned losses on 58% days in the last three months. During this time, it delivered on average -0.3% per day. It delivered it's best daily return of +8.67%, during this period, on Tuesday, 30 Oct, 2018. There was initially a bullish trend during this period which started on 27 Sep, 2018 and went on till 2 Oct, 2018. The bullish trend returned +5.75% to investors. This was followed by a bearish trend that started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -12.38% of investor capital.

KBR had 7 profitable and 5 loss making months over the last year. During the last year, KBR underperformed SP500 index on monthly return basis. KBR was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -25.57% compared to -7.28% returned by SP500 index in Oct 2018. KBR 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 KBR and SP500 index significantly outperform during months when quarterly/annual results are announced.

Success is walking from failure to failure with no loss of enthusiasm.
-- Winston Churchill

KBR 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 surge in KBR's volatility from 9 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 KBR has significant positive skewness in it's return distribution. This indicates that investors can expect KBR to recover from drawdowns quickly. Which makes KBR 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 KBR. Therefore, SP500 must receive a lower allocation than KBR in your portfolio. SP500 index usually has shorter drawdown period than KBR.

On a general note (since you are interested in KBR), two instruments that have delivered similar performance as KBR are PIH and DKS. They are suitable as good alternative investment candidates that can diversify your portfolio.

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