Are you evaluating investing in LSTR? Avoid as it delivered massive losses
11 Dec, 201813 min read
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LSTR delivered massive losses today. On a longer term basis, investors in LANDSTAR SYSTEM INC made +0.05% per day. Tuesday's performance of -0.43% was a significant underperformance compared to it's daily average.
LSTR showed a strong down trend over the last 3 months. During this period LSTR lost -22.05% and saw a maximum drawdown of -22.46%. There were 2 short signals during this period that returned a cumulative of +5.13% to investors.
LSTR has been underperforming the SP500 index in recent time, after having outperformed till 10 Sep, 2018. Over the last 2 years 11 months and 7 days, LSTR outperformed the SP500 index on 52% days.
During the last three months LSTR was mostly loss making and delivered on average -0.39% per day. It's best return during this period (of +2.24%) was on Thursday, 15 Nov, 2018. While it's worst loss in the same period (of -5.98%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -10.65% losses to investors. This was followed by a bullish trend that started on 1 Nov, 2018 and ended on 7 Nov, 2018. This bullish trend delivered +6.38% to investors.
LSTR had 6 profitable and 6 loss making months over the last year. During the last year, LSTR underperformed SP500 index on monthly return basis. LSTR was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -17.25% compared to -7.28% returned by SP500 index in Oct 2018. LSTR had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year.
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LSTR 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 LSTR's volatility from 28 Sep, 2018 to 7 Dec, 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 LSTR has significant positive skewness in it's return distribution. This indicates that investors can expect LSTR to recover from drawdowns quickly. Which makes LSTR a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
LSTR has more chance of extreme outcomes than the SP500 index. Therefore, LSTR must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than LSTR.
Based on your interest in LSTR you may find it interesting to know that AAXN is a small cap that has shown remarkable performance and deserves to be on every investors' watchlist.
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