57.5 -0.67 (-1.17%) Buy

ORBK investors herd to book profits while the going is good

13 min read

ORBOTECH LTD (Foreign) was among the worst performers today. It fell by -1.17% to close at 57.5. It's recent 5 day performance has been -0.82%, -0.26%, +1.12%, +0.52% and -0.43%.

[Themes containing ORBK]

ORBK is currently in a bullish trend. Over the last three months trading long signals has not been a profitable strategy for ORBK's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -5.35%). It is therefore better to tread with caution in the current uptrend by limiting your allocation to ORBK.


ORBK has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 17 Feb, 2016 to 5 Jun, 2018. Over the last 2 years 11 months and 10 days, ORBK outperformed the SP500 index on 54% days.

ORBK returned losses on 54% days in the last three months. During this time, it delivered on average -0.07% per day. It delivered it's best daily return of +5.0%, during this period, on Tuesday, 30 Oct, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 23 Nov, 2018 and went on till 3 Dec, 2018. This bullish trend returned +12.69% to investors.

During the last year ORBK had 7 profitable months and 5 loss making months. ORBK returned profits in fewer months than SP500 index. ORBK significantly outperformed SP500 index in Mar 2018, when it returned +13.14% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ORBK had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

"The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.

ORBK 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 ORBK's volatility from 24 Sep, 2018 to 5 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 ORBK 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 ORBK. Therefore, SP500 must receive a lower allocation than ORBK in your portfolio. SP500 index usually has shorter drawdown period than ORBK.

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

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