Stop-loss on the minds of LEG investors as it ranked among the worst performers
13 Dec, 201813 min read
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LEGGETT & PLATT INC delivered massive losses on Thursday. It lost -2.42% to close at 36.64. On a day when the overall market breadth was 35%, it closed higher than 13% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.
LEG is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +12.61% for investors.
LEG has been underperforming the SP500 index in recent time, after having outperformed till 28 Jul, 2016. Over the last 2 years 11 months and 9 days, LEG underperformed the SP500 index on 49% days. Which indicates that on days LEG underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
LEG returned losses on 64% days in the last three months. During this time, it delivered on average -0.35% per day. It delivered it's worst daily return of -9.79%, during this period, on Friday, 26 Oct, 2018. There was initially a bearish trend during this period which started on 19 Sep, 2018 and went on till 27 Sep, 2018. The trend delivered -5.14% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 2 Nov, 2018. This bullish trend delivered +9.88% to investors.
LEG had 5 profitable and 7 loss making months over the last year. During the last year, LEG underperformed SP500 index on monthly return basis. LEG was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -16.78% compared to -7.28% returned by SP500 index in Oct 2018. LEG had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year.
Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.
-- Charles Dickens
LEG 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 LEG's volatility from 14 Sep, 2018 to 30 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that LEG has significant positive skewness in it's return distribution. This indicates that investors can expect LEG to recover from drawdowns quickly. Which makes LEG 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 LEG. Therefore, SP500 must receive a lower allocation than LEG in your portfolio. SP500 index usually has shorter drawdown period than LEG.
Based on your interest in LEG you may find it interesting to know that BURL is a small cap that has shown remarkable performance and deserves to be on every investors' watchlist.
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