POWER INTEGRATIONS INC

59.09 -1.27 (-2.15%) Buy

POWI investors herd to book profits while the going is good

13 min read

POWI was among the worst performers today. On a longer term basis, investors in POWER INTEGRATIONS INC made +0.01% per day. Friday's performance of -2.15% was a underperformance compared to it's daily average.

[Themes containing POWI]

Buy-and-Hold investors in POWI experienced a maximum drawdown of -28.14% over the last three months. It delivered -15.34% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +10.6%.

Trend

POWI has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 20 Jul, 2017 to 26 Oct, 2018. Over the last 2 years 11 months and 3 days, POWI underperformed the SP500 index on 47% days. Which indicates that on days POWI underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

POWI returned losses on 53% days in the last three months. During this time, it delivered on average -0.23% per day. It delivered it's worst daily return of -7.42%, during this period, on Friday, 26 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 1 Oct, 2018 and ended on 8 Oct, 2018. This bearish trend lost -9.31% of investor capital.

The last 12 months saw POWI's investors making profits in 5 months and incurring losses in 7 months. POWI was less consistent in delivering monthly returs than SP500 index. POWI was also a more risky investment than SP500 index as it's worst month in the last year, Sep 2018, returned -13.84% compared to -7.28% returned by SP500 index in Oct 2018. POWI had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

Innovation distinguishes between a leader and a follower.
-- Steve Jobs

POWI 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 POWI's volatility from 10 Sep, 2018 to 30 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that POWI has significant positive skewness in it's return distribution. This indicates that investors can expect POWI to recover from drawdowns quickly. Which makes POWI 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 POWI. Therefore, SP500 must receive a lower allocation than POWI in your portfolio. SP500 index usually has shorter drawdown period than POWI.

Based on your interest in POWI you may find it interesting to know that AMD is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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