OTTER TAIL CORP

50.67 -0.53 (-1.05%) Buy

Don't go shopping for OTTR now, it is underperforming the market

13 min read

OTTER TAIL CORP significantly underperformed on Friday. It delivered -1.05% to close at 50.67. On a day when the overall market breadth was 35%, it closed higher than 75% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

OTTR showed a bullish trend over the last 3 months. During this period OTTR increased by +3.94% and saw a maximum drawdown of -8.16%. There was a long signal during this period which returned +6.76%.

Trend

OTTR has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 4 Jan, 2016 to 12 Dec, 2018. Over the last 2 years 11 months and 10 days, OTTR outperformed the SP500 index on 52% days.

During the last three months OTTR was mostly profitable and delivered on average +0.07% per day. It's best return during this period (of +5.26%) was on Tuesday, 6 Nov, 2018. While it's worst loss in the same period (of -3.19%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 2 Nov, 2018 and went on till 8 Nov, 2018. This bullish trend returned +8.01% to investors.

The last 12 months saw OTTR's investors making profits in 7 months and incurring losses in 5 months. OTTR was less consistent in delivering monthly returs than SP500 index. OTTR significantly outperformed SP500 index in Mar 2018, when it returned +8.92% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. OTTR had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

When you stop chasing the wrong things you give the right things a chance to catch you.
-- Lolly Daskal

OTTR 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 OTTR's volatility from 17 Sep, 2018 to 12 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 OTTR 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 OTTR. Therefore, SP500 must receive a lower allocation than OTTR in your portfolio. SP500 index usually has shorter drawdown period than OTTR.

Based on your interest in OTTR you may find it interesting to know that CSCO, UNH and MSFT are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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