153.83 -2.43 (-1.58%) Sell

Don't buy PH now, it is a really dangerous investment now

13 min read

PH was among the worst performers today. On a longer term basis, investors in PARKER HANNIFIN CORP made -0.04% per day. Tuesday's performance of -1.58% was a underperformance compared to it's daily average.

[Themes containing PH]

PH showed a strong bearish trend over the last 3 months. During this period PH delivered -16.1% and saw a maximum drawdown of -23.8%. There were 2 short signals during this period that returned a cumulative of +5.82% to investors.


PH has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 20 Jan, 2016 to 16 Jan, 2018. Over the last 2 years 11 months and 7 days, PH outperformed the SP500 index on 54% days.

PH returned losses on 58% days in the last three months. During this time, it delivered on average -0.26% per day. It delivered it's best daily return of +5.09%, during this period, on Thursday, 1 Nov, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 12 Sep, 2018 and went on till 21 Sep, 2018. This bullish trend returned +3.9% to investors.

The last 12 months saw PH's investors making profits in 6 months and incurring losses in 6 months. PH was less consistent in delivering monthly returs than SP500 index. PH was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -17.98% compared to -7.28% returned by SP500 index in Oct 2018. PH had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

I have probably purchased fifty 'hot tips' in my career, maybe even more. When I put them all together, I know I am a net loser.
-- Charles Schwab

PH is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in PH's volatility from 4 Oct, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that PH has significant positive skewness in it's return distribution. This indicates that investors can expect PH to recover from drawdowns quickly. Which makes PH a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

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

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