KODK does a dead cat bounce, it's still too early to buy into it
18 Dec, 201813 min read
Share with friends 
EASTMAN KODAK CO outperformed on Tuesday. It surged by +1.75% to close at 2.91. On a day when the overall market breadth was 34%, it closed higher than 10% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.
KODK showed a bullish trend over the last 3 months. During this period KODK surged by +2.11% and saw a maximum drawdown of -36.74%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in KODK till volatility reduces and a clear trend emerges.
KODK has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 18 Jul, 2016 to 20 Sep, 2018. Over the last 2 years 11 months and 14 days, KODK underperformed the SP500 index on 53% days.
KODK returned losses on 54% days in the last three months. During this time, it delivered on average +0.18% per day. It delivered it's best daily return of +18.45%, during this period, on Monday, 12 Nov, 2018. The longest stort-term trend during this period was 5 losing days, which started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -38.31% of investor capital.
During the last year KODK had 5 profitable months and 7 loss making months. KODK returned profits in fewer months than SP500 index. KODK significantly outperformed SP500 index in Jan 2018, when it returned +152.38% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. KODK and SP500 index, both had periods of 2 consecutive losing months.
"Finance is wholly different from the rest the economy.
KODK is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant fall in KODK's volatility from 19 Sep, 2018 to 27 Sep, 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 KODK 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.
Investors trading in KODK derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than KODK. Therefore, SP500 must receive a lower allocation than KODK in your portfolio. SP500 index usually has shorter drawdown period than KODK.
Based on your interest in KODK you may find it interesting to know that CSCO, PFE and AMZN are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.
... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.
All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.
We want to empower investors with all the tools and analysis required by them to make a rational investment decision.
If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute