25.77 +0.32 (+1.26%) Sell

Are you evaluating investing in NAV? Consider as it managed to marginally outperform the broader market

13 min read

NAVISTAR INTERNATIONAL CORP delivered stellar performance on Friday. It gained +1.26% to close at 25.77. On a day when the overall market breadth was 35%, it closed higher than 79% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing NAV]

NAV showed a strong down trend over the last 3 months. During this period NAV lost -37.08% and saw a maximum drawdown of -40.77%. There was a short signal during this period which returned +37.08%.


NAV has been underperforming the SP500 index in recent time, after having outperformed till 26 Jan, 2018. Over the last 2 years 11 months and 10 days, NAV outperformed the SP500 index on 51% days.

NAV returned losses on 64% days in the last three months. During this time, it delivered on average -0.69% per day. It delivered it's worst daily return of -11.01%, during this period, on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 2 Oct, 2018. The trend delivered -12.33% losses to investors. This was followed by a bullish trend that started on 28 Nov, 2018 and ended on 3 Dec, 2018. This bullish trend delivered +6.43% to investors.

NAV had 6 profitable and 6 loss making months over the last year. During the last year, NAV underperformed SP500 index on monthly return basis. NAV was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -19.57% compared to -7.28% returned by SP500 index in Oct 2018. NAV had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both NAV and SP500 index significantly outperform during months when quarterly/annual results are announced.

How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.
-- Robert G. Allen

NAV 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 NAV's volatility from 17 Sep, 2018 to 30 Oct, 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 NAV 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.

Investors trading in NAV 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 NAV. Therefore, SP500 must receive a lower allocation than NAV in your portfolio. SP500 index usually has shorter drawdown period than NAV.

On a general note (since you are interested in NAV), AAXN is a small cap that deserves to be closely tracked for investment opportunities.

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