Looking to invest in MET? Avoid at the moment as it ranked among the worst performers
14 Dec, 201813 min read
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METLIFE INC ranked among the worst performers on Friday. It fell by -1.59% to close at 38.89 which is it's 52 week low, down -28% from it's 52 week high.
MET showed a strong bearish trend over the last 3 months. During this period MET fell by -15.8% and saw a maximum drawdown of -20.29%. There were 2 short signals during this period that returned a cumulative of +7.82% to investors.
MET has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 1 Dec, 2016 to 12 Sep, 2018. Over the last 2 years 11 months and 10 days, MET underperformed the SP500 index on 48% days. Which indicates that on days MET underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
MET returned losses on 53% days in the last three months. During this time, it delivered on average -0.26% per day. It delivered it's worst daily return of -5.41%, during this period, on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 9 profitable days, which started on 29 Oct, 2018 and went on till 8 Nov, 2018. This bullish trend returned +14.02% to investors.
During the last year MET had 5 profitable months and 7 loss making months. MET returned profits in fewer months than SP500 index. MET was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -12.86% compared to -7.28% returned by SP500 index in Oct 2018. MET had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both MET and SP500 index significantly outperform during months when quarterly/annual results are announced.
It's not the situation, but whether we react (negative) or respond (positive) to the situation that's important.
-- Zig Ziglar
MET is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in MET's volatility from 27 Sep, 2018 to 11 Dec, 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 MET has significant positive skewness in it's return distribution. This indicates that investors can expect MET to recover from drawdowns quickly. Which makes MET a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in MET derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than MET. Therefore, SP500 must receive a lower allocation than MET in your portfolio. MET usually has shorter drawdown period than the SP500 index.
Based on your interest in MET you may find it interesting to know that UFCS has delivered similar performance as MET and can be considered as an alternative investment candidate (to MET).
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