MERITOR INC

15.96 -0.2 (-1.24%) Sell

Stop-loss on the minds of MTOR investors as it was among the worst performers

13 min read

MERITOR INC was among the worst performers on Friday. It lost -1.24% to close at 15.96. On a day when the overall market breadth was 35%, it closed higher than 8% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing MTOR]

MTOR is currently in a down trend. The current bearish signal has generated a profit of +22.07% for investors in the last three months.

Trend

MTOR has been underperforming the SP500 index in recent time, after having outperformed till 1 Feb, 2018. Over the last 2 years 11 months and 10 days, MTOR outperformed the SP500 index on 49% days. Which indicates that on days MTOR outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months MTOR was mostly loss making and delivered on average -0.36% per day. It's best return during this period (of +4.22%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -8.61%) was on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 26 Sep, 2018. The trend delivered -8.25% losses to investors. This was followed by a bullish trend that started on 2 Oct, 2018 and ended on 4 Oct, 2018. This bullish trend delivered +4.52% to investors.

MTOR had 4 profitable and 8 loss making months over the last year. During the last year, MTOR underperformed SP500 index on monthly return basis. MTOR significantly outperformed SP500 index in Jan 2018, when it returned +17.94% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. MTOR had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -28.51%. It is interesting to note that both MTOR and SP500 index significantly outperform during months when quarterly/annual results are announced.

"The avoidance of taxes is the only intellectual pursuit that still carries any reward.

MTOR 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 MTOR's volatility from 17 Sep, 2018 to 15 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 MTOR 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 MTOR. Therefore, SP500 must receive a lower allocation than MTOR in your portfolio. SP500 index usually has shorter drawdown period than MTOR.

On a general note (since you are interested in MTOR), two instruments that have delivered similar performance as MTOR are OSBC and DECK. They are suitable as good alternative investment candidates that can diversify your portfolio.

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