MEDICINES CO

18.0 -1.0 (-5.56%) Sell

MDCO is a falling knife, continues to bleed every investor trying to catch it

13 min read

MEDICINES CO delivered massive losses on Monday. It lost -5.56% to close at 18.0 which is it's 52 week low, down -56% from it's 52 week high.

[Themes containing MDCO]

MDCO is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +36.9% for investors.

Trend

MDCO has been underperforming the SP500 index in recent time, after having outperformed till 11 Apr, 2017. Over the last 2 years 11 months and 10 days, MDCO underperformed the SP500 index on 53% days.

MDCO returned losses on 70% days in the last three months. During this time, it delivered on average -0.92% per day. It delivered it's worst daily return of -14.5%, during this period, on Thursday, 13 Dec, 2018. There was initially a bullish trend during this period which started on 28 Sep, 2018 and went on till 2 Oct, 2018. The bullish trend returned +4.92% to investors. This was followed by a bearish trend that started on 3 Oct, 2018 and ended on 12 Oct, 2018. This bearish trend lost -16.95% of investor capital.

MDCO had 5 profitable and 7 loss making months over the last year. During the last year, MDCO underperformed SP500 index on monthly return basis. MDCO was also a more risky investment than SP500 index as it's worst month in the last year, Sep 2018, returned -24.49% compared to -7.28% returned by SP500 index in Oct 2018. MDCO had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -66.73%. It is interesting to note that both MDCO and SP500 index significantly outperform during months when quarterly/annual results are announced.

"I grew up in Finance.

MDCO 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 MDCO's volatility from 19 Sep, 2018 to 14 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that MDCO has significant negative skewness in it's return distribution. This indicates that MDCO is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in MDCO you may find it interesting to know that MBI and MYE have both performed similar to MDCO and can be considered by investors as alternative investment options.

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