Search for alternative investments is on for MGRC investors as it underperforms
17 Dec, 201813 min read
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MCGRATH RENTCORP showed weakness today. It lost -0.71% to close at 51.78. It's recent 5 day performance has been -1.04%, -1.03%, +1.45%, +1.49% and -0.79%.
MGRC is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +2.27% for investors.
MGRC has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, MGRC outperformed the SP500 index on 52% days.
During the last three months MGRC was mostly loss making and delivered on average -0.05% per day. It's best return during this period (of +11.53%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -4.32%) was on Tuesday, 2 Oct, 2018. There was initially a bearish trend during this period which started on 8 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -5.01% losses to investors. This was followed by a bullish trend that started on 13 Nov, 2018 and ended on 16 Nov, 2018. This bullish trend delivered +1.2% to investors.
MGRC had 6 profitable and 6 loss making months over the last year. During the last year, MGRC underperformed SP500 index on monthly return basis. MGRC significantly outperformed SP500 index in Apr 2018, when it returned +11.46% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. MGRC had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.
Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.
-- George Soros
MGRC 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 MGRC's volatility from 20 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that MGRC has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
SP500 index has more chance of extreme outcomes than MGRC. Therefore, SP500 must receive a lower allocation than MGRC in your portfolio. SP500 index usually has shorter drawdown period than MGRC.
Based on your interest in MGRC you may find it interesting to know that BLBD and YUM have both performed similar to MGRC and can be considered by investors as alternative investment options.
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