24.78 -0.68 (-2.75%) Sell

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

13 min read

POWELL INDUSTRIES INC significantly underperformed on Friday. It returned -2.75% to close at 24.78. On a day when the overall market breadth was 35%, it closed higher than 75% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing POWL]

Buy-and-Hold investors in POWL experienced a maximum drawdown of -32.09% over the last three months. It returned -32.09% during this strong down 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 +22.01%.


POWL has been underperforming the SP500 index in recent time, after having outperformed till 6 Dec, 2016. POWL is currently at it's worst performance to the SP500 index and therefore does not make a good investment candidate. Over the last 2 years 11 months and 10 days, POWL underperformed the SP500 index on 50% days. Which indicates that on days POWL underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

POWL returned losses on 69% days in the last three months. During this time, it delivered on average -0.58% per day. It delivered it's best daily return of +9.53%, during this period, on Tuesday, 6 Nov, 2018. There was initially a bullish trend during this period which started on 27 Sep, 2018 and went on till 28 Sep, 2018. The bullish trend returned +7.85% to investors. This was followed by a bearish trend that started on 4 Oct, 2018 and ended on 15 Oct, 2018. This bearish trend lost -12.63% of investor capital.

On monthly basis, POWL delivered profits in more months over the last year, than losses. POWL delivered profits less regularly than SP500 index. POWL was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -18.94% compared to -7.28% returned by SP500 index in Oct 2018. POWL and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both POWL and SP500 index significantly outperform during months when quarterly/annual results are announced.

Wealth is the ability to fully experience life.
-- Henry David Thoreau

POWL 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 fall in POWL's volatility from 17 Sep, 2018 to 30 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 POWL has positive skewness in it's return distribution. This indicates that investors can expect POWL to make attempts to recover from drawdowns quickly. Which makes POWL a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

On a general note (since you are interested in POWL), AMRH has performed really well and deserves to be closely tracked for investment opportunities.

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