PDCO investors take a massive hit

PATTERSON COMPANIES, INC. is a falling knife that can bleed you if you catch it today. It lost -5.01% to close at 21.6. During the last week it lost -4.17% and saw a maximum drawdown of -7.18% before bouncing back.

[Themes containing PDCO]

PDCO is currently in a down trend. Over the last three months trading short signals has not been a profitable strategy for PDCO's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -13.01%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to PDCO.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

PDCO has been underperforming the SP500 index in recent time, after having outperformed till 9 Jun, 2016. Over the last 2 years 11 months and 10 days, PDCO underperformed the SP500 index on 49% days. Which indicates that on days PDCO underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

PDCO was profitable on 52% days in the last three months. During this time, it delivered on average -0.19% per day. It delivered it's worst daily return of -6.02%, during this period, on Thursday, 6 Dec, 2018. There was initially a bearish trend during this period which started on 24 Sep, 2018 and went on till 27 Sep, 2018. The trend delivered -5.48% losses to investors. This was followed by a bullish trend that started on 12 Nov, 2018 and ended on 19 Nov, 2018. This bullish trend delivered +7.67% to investors.

PDCO had 5 profitable and 7 loss making months over the last year. During the last year, PDCO underperformed SP500 index on monthly return basis. PDCO was also a more risky investment than SP500 index as it's worst month in the last year, Mar 2018, returned -29.61% compared to -7.28% returned by SP500 index in Oct 2018. PDCO had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -46.87%. It is interesting to note that both PDCO and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you're generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don't make.

PDCO is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in PDCO's volatility from 18 Sep, 2018 to 6 Dec, 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 PDCO has significant positive skewness in it's return distribution. This indicates that investors can expect PDCO to recover from drawdowns quickly. Which makes PDCO 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 PDCO. Therefore, SP500 must receive a lower allocation than PDCO in your portfolio. PDCO usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in PDCO), three instruments that deserve special mention are APRN, AMRH and SBOT. They have all outperformed the market and must be closely watched for investment opportunities.