O REILLY AUTOMOTIVE INC

348.17 -6.27 (-1.8%) Sell

The party never started for ORLY investors as it significantly underperforms

13 min read

O REILLY AUTOMOTIVE INC significantly underperformed on Friday. It returned -1.8% to close at 348.17. On a day when the overall market breadth was 35%, it closed higher than 5% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing ORLY]

Buy-and-Hold investors in ORLY experienced a maximum drawdown of -7.69% over the last three months. It gained +3.42% during this up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.

Trend

ORLY has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, ORLY outperformed the SP500 index on 51% days.

ORLY was profitable on 63% days in the last three months. During this time, it delivered on average +0.07% per day. It delivered it's worst daily return of -5.14%, during this period, on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 2 Nov, 2018 and went on till 9 Nov, 2018. The bullish trend returned +10.25% to investors. This was followed by a bearish trend that started on 29 Nov, 2018 and ended on 3 Dec, 2018. This bearish trend lost -3.52% of investor capital.

On monthly basis, ORLY delivered profits in more months over the last year, than losses. ORLY delivered profits in more months than SP500 index. ORLY significantly outperformed SP500 index in Jul 2018, when it returned +11.47% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ORLY had a longer winning streak of profitable months than SP500 index. It went up in 7 straight months (from Mar 2018 to Sep 2018) during which period it delivered +41.16%. It is interesting to note that both ORLY and SP500 index significantly outperform during months when quarterly/annual results are announced.

"There are no patents in finance.

ORLY 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 ORLY's volatility from 3 Oct, 2018 to 26 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 ORLY has significant positive skewness in it's return distribution. This indicates that investors can expect ORLY to recover from drawdowns quickly. Which makes ORLY a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than ORLY. Therefore, SP500 must receive a lower allocation than ORLY in your portfolio. ORLY usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in ORLY), if you are an investor in IX, you need to be extra careful (consider limiting your exposure or diversifying) as it is extremely unpredictable and therefore risky.

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