32.56 -0.39 (-1.18%) Sell

PAHC is a falling knife, continues to bleed every investor trying to catch it

13 min read

PHIBRO ANIMAL HEALTH CORP significantly underperformed on Monday. It fell by -1.18% to close at 32.56. It is currently trading -39% below it's 52 week high of 53.5.

[Themes containing PAHC]

Buy-and-Hold investors in PAHC experienced a maximum drawdown of -27.06% over the last three months. It fell by -25.58% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +25.58% for investors.


PAHC has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 10 May, 2016 to 27 Aug, 2018. Over the last 2 years 11 months and 10 days, PAHC underperformed the SP500 index on 50% days. Which indicates that on days PAHC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

PAHC returned losses on 58% days in the last three months. During this time, it delivered on average -0.45% per day. It delivered it's worst daily return of -8.25%, during this period, on Wednesday, 7 Nov, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 12 Oct, 2018 and went on till 23 Oct, 2018. This bullish trend returned +6.99% to investors.

During the last year PAHC had 6 profitable months and 6 loss making months. PAHC returned profits in fewer months than SP500 index. PAHC was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -21.02% compared to -7.28% returned by SP500 index in Oct 2018. PAHC and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both PAHC and SP500 index significantly outperform during months when quarterly/annual results are announced.

"I believe that through knowledge and discipline, financial peace is possible for all of us.

PAHC 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 PAHC's volatility from 22 Oct, 2018 to 9 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 PAHC has significant positive skewness in it's return distribution. This indicates that investors can expect PAHC to recover from drawdowns quickly. Which makes PAHC 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 PAHC. Therefore, SP500 must receive a lower allocation than PAHC in your portfolio. SP500 index usually has shorter drawdown period than PAHC.

On a general note (since you are interested in PAHC), three small cap instruments that deserve special mention are KEYS, BURL and AAXN. They have all outperformed the market and must be closely watched for investment opportunities.

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