64.77 -0.35 (-0.54%) Sell

Search for alternative investments is on for NP investors as it shows weakness

13 min read

NEENAH INC underperformed broader market today. It delivered -0.54% to close at 64.77. During the last week it surged by +0.06% and saw a maximum drawdown of -0.54% before bouncing back.

[Themes containing NP]

Buy-and-Hold investors in NP experienced a maximum drawdown of -32.08% over the last three months. It delivered -30.47% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +23.67%.


NP has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 8 Dec, 2016 to 6 Dec, 2018. Over the last 2 years 11 months and 10 days, NP underperformed the SP500 index on 49% days. Which indicates that on days NP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

NP returned losses on 62% days in the last three months. During this time, it delivered on average -0.57% per day. It delivered it's worst daily return of -6.05%, during this period, on Wednesday, 7 Nov, 2018. The longest stort-term trend during this period was 7 losing days, which started on 4 Oct, 2018 and ended on 12 Oct, 2018. This bearish trend lost -10.67% of investor capital.

The last 12 months saw NP's investors making profits in 6 months and incurring losses in 6 months. NP was less consistent in delivering monthly returs than SP500 index. NP was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -15.3% compared to -7.28% returned by SP500 index in Oct 2018. NP and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both NP and SP500 index significantly outperform during months when quarterly/annual results are announced.

Everyday is a bank account, and time is our currency. No one is rich, no one is poor, we've got 24 hours each.
-- Christopher Rice

NP 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 NP's volatility from 20 Sep, 2018 to 7 Nov, 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 NP 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 NP. Therefore, SP500 must receive a lower allocation than NP in your portfolio. SP500 index usually has shorter drawdown period than NP.

On a general note (since you are interested in NP), if you are evaluating NP as an investment candidate, then you should read about TAP which has delivered similar performance and can help diversify your portfolio.

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