MOD shows sign of weakness as investors do cost averaging
12 Dec, 201813 min read
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MODINE MANUFACTURING CO showed marginal outperformance on Wednesday. It increased by +0.34% to close at 11.83. It is currently trading -52% below it's 52 week high of 25.1.
Buy-and-Hold investors in MOD experienced a maximum drawdown of -27.15% over the last three months. It fell by -22.68% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +22.68% for investors.
MOD has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 2 Feb, 2016 to 26 Feb, 2018. Over the last 2 years 11 months and 8 days, MOD outperformed the SP500 index on 48% days. Which indicates that on days MOD outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.
During the last three months MOD was mostly loss making and delivered on average -0.36% per day. It's best return during this period (of +19.28%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -8.06%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 4 losing days, which started on 17 Oct, 2018 and ended on 22 Oct, 2018. This bearish trend lost -5.55% of investor capital.
During the last year MOD had 3 profitable months and 9 loss making months. MOD returned profits in fewer months than SP500 index. MOD was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -21.02% compared to -8.27% returned by SP500 index in Oct 2018. MOD had a longer winning streak of losing months than SP500 index. It went down in 6 straight months (from Jul 2018 to Dec 2018) during which period it delivered -54.82%.
Investment philosophy is the clear understanding that by owning shares of stocks he owns businesses, not pieces of paper.
-- Warren Edward Buffett
MOD is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in MOD's volatility from 5 Oct, 2018 to 1 Nov, 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 MOD 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 MOD. Therefore, SP500 must receive a lower allocation than MOD in your portfolio. SP500 index usually has shorter drawdown period than MOD.
Based on your interest in MOD you may find it interesting to know that APRN, AMRH and NSPR have all shown remarkable performance and qualify to be on every investor's watchlist.
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