OWENS ILLINOIS INC

16.61 -0.35 (-2.12%) Sell

Doubt in the minds of OI investors as it ranked among the worst performers

13 min read

OWENS ILLINOIS INC delivered massive losses on Monday. It fell by -2.12% to close at 16.61. On a day when the overall market breadth was 34%, it closed higher than 73% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing OI]

OI is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for OI's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -16.2%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to OI.

Trend

OI has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 10 Oct, 2017 to 31 Oct, 2018. Over the last 2 years 11 months and 10 days, OI underperformed the SP500 index on 49% days. Which indicates that on days OI underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

OI returned losses on 59% days in the last three months. During this time, it delivered on average -0.25% per day. It delivered it's best daily return of +6.89%, during this period, on Thursday, 1 Nov, 2018. The longest stort-term trend during this period was 5 losing days, which started on 18 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -12.88% of investor capital.

During the last year OI had 5 profitable months and 7 loss making months. OI returned profits in fewer months than SP500 index. OI significantly outperformed SP500 index in Nov 2018, when it returned +17.36% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. OI had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Apr 2018 to Jun 2018) during which period it delivered -22.05%. It is interesting to note that both OI and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money won't create success, the freedom to make it will.
-- Nelson Mandela

OI 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 OI's volatility from 1 Oct, 2018 to 2 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 OI 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 OI. Therefore, SP500 must receive a lower allocation than OI in your portfolio. SP500 index usually has shorter drawdown period than OI.

On a general note (since you are interested in OI), two instruments that deserve special mention are PRQR and NFEC. They have significantly outperformed the overall market this year.

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