PNR investors update their stop-losses higher
13 Dec, 201813 min read
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PENTAIR PLC delivered good returns on Thursday. It grew by +0.25% to close at 39.69. On a day when the overall market breadth was 35%, it closed higher than 73% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.
PNR is currently in a down trend. The current bearish signal has generated a profit of +9.94% for investors in the last three months.
PNR has been underperforming the SP500 index in recent time, after having outperformed till 15 Aug, 2016. Over the last 2 years 11 months and 9 days, PNR underperformed the SP500 index on 48% days. Which indicates that on days PNR underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months PNR was mostly loss making and delivered on average -0.16% per day. It's best return during this period (of +3.03%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -4.52%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 5 Oct, 2018 and went on till 15 Oct, 2018. The trend delivered -11.3% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 8 Nov, 2018. This bullish trend delivered +10.27% to investors.
PNR had 4 profitable and 8 loss making months over the last year. During the last year, PNR underperformed SP500 index on monthly return basis. PNR was also a more risky investment than SP500 index as it's worst month in the last year, May 2018, returned -35.14% compared to -7.28% returned by SP500 index in Oct 2018. PNR had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -10.22%. It is interesting to note that both PNR and SP500 index significantly outperform during months when quarterly/annual results are announced.
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PNR 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 PNR's volatility from 17 Sep, 2018 to 24 Oct, 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 PNR has significant positive skewness in it's return distribution. This indicates that investors can expect PNR to recover from drawdowns quickly. Which makes PNR 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 PNR. Therefore, SP500 must receive a lower allocation than PNR in your portfolio. PNR usually has shorter drawdown period than the SP500 index.
Based on your interest in PNR you may find it interesting to know that NSPR has shown remarkable performance and deserves to be on every investors' watchlist.
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