LINCOLN ELECTRIC HOLDINGS INC

81.72 +1.27 (+1.55%) Sell

LECO investors considering profit booking at current levels

13 min read

LINCOLN ELECTRIC HOLDINGS INC outperformed today. It surged by +1.55% to close at 81.72. It's recent 5 day performance has been +1.12%, -0.49%, -3.31%, +0.36% and -4.73%.

[Themes containing LECO]

LECO is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for LECO's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -13.55%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to LECO.

Trend

LECO has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 22 Jan, 2016 to 19 Jun, 2017. Over the last 2 years 11 months and 8 days, LECO outperformed the SP500 index on 54% days.

LECO was profitable on 50% days in the last three months. During this time, it delivered on average -0.21% per day. It delivered it's worst daily return of -4.98%, during this period, on Wednesday, 24 Oct, 2018. The longest stort-term trends during this period were 6 profitable and losing days. The bullish trend (which returned +10.02%) started on 26 Oct, 2018 and went on till 2 Nov, 2018 while the bearish trend (which returned -12.43%) started on 4 Oct, 2018 and went on till 11 Oct, 2018.

During the last year LECO had 6 profitable months and 6 loss making months. LECO returned profits in fewer months than SP500 index. LECO was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -13.77% compared to -7.28% returned by SP500 index in Oct 2018. LECO had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both LECO and SP500 index significantly outperform during months when quarterly/annual results are announced.

There is nothing wrong with changing a plan when the situation has changed.
-- Seneca

LECO 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 LECO's volatility from 21 Sep, 2018 to 25 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that LECO has significant positive skewness in it's return distribution. This indicates that investors can expect LECO to recover from drawdowns quickly. Which makes LECO a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in LECO you may find it interesting to know that V is a large cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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