14.6 -0.61 (-4.2%) Sell

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

13 min read

LIONS GATE ENTERTAINMENT CORP was among the worst performers on Thursday. It returned -4.2% to close at 14.6 which is it's 52 week low, down -56% from it's 52 week high.

[Themes containing LGFB]

LGFB showed a strong down trend over the last 3 months. During this period LGFB returned -32.78% and saw a maximum drawdown of -37.79%. There was a short signal during this period which returned +32.78%.


LGFB has been underperforming the SP500 index in recent time, after having outperformed till 4 Jan, 2016. LGFB is currently at it's worst performance to the SP500 index and therefore does not make a good investment candidate. Over the last 2 years 11 months and 9 days, LGFB underperformed the SP500 index on 53% days.

LGFB returned losses on 61% days in the last three months. During this time, it delivered on average -0.57% per day. It delivered it's worst daily return of -8.99%, during this period, on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 25 Sep, 2018 and went on till 28 Sep, 2018. The bullish trend returned +14.09% 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 -22.35% of investor capital.

On monthly basis, LGFB delivered losses in more months over the last year, than profits. LGFB delivered profits less regularly than SP500 index. LGFB was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -20.58% compared to -7.28% returned by SP500 index in Oct 2018. LGFB had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Feb 2018 to May 2018) during which period it delivered -34.28%. It is interesting to note that both LGFB 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

LGFB is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in LGFB's volatility from 26 Sep, 2018 to 11 Dec, 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 LGFB has significant positive skewness in it's return distribution. This indicates that investors can expect LGFB to recover from drawdowns quickly. Which makes LGFB 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 LGFB. Therefore, SP500 must receive a lower allocation than LGFB in your portfolio. LGFB usually has shorter drawdown period than the SP500 index.

Based on your interest in LGFB you may find it interesting to know that NSPR and AMRH have both shown remarkable performance and deserve to be on every investors' watchlist.

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