64.12 -2.7 (-4.21%) Sell

Looking to invest in REX? Avoid at the moment as it ranked among the worst performers

13 min read

REX AMERICAN RESOURCES CORP ranked among the worst performers on Monday. It fell by -4.21% to close at 64.12. On a day when the overall market breadth was 34%, it closed higher than 8% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing REX]

REX showed a strong bearish trend over the last 3 months. During this period REX fell by -15.61% and saw a maximum drawdown of -18.33%. There was a short signal during this period which returned +13.07%.


REX has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 11 May, 2017 to 28 Nov, 2018. Over the last 2 years 11 months and 10 days, REX underperformed the SP500 index on 45% days. Which indicates that on days REX underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

REX returned losses on 58% days in the last three months. During this time, it delivered on average -0.25% per day. It delivered it's worst daily return of -5.18%, during this period, on Wednesday, 10 Oct, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +5.37%) started on 10 Dec, 2018 and went on till 13 Dec, 2018 while the bearish trend (which returned -4.26%) started on 12 Nov, 2018 and went on till 15 Nov, 2018.

During the last year REX had 4 profitable months and 8 loss making months. REX returned profits in fewer months than SP500 index. REX was also a more risky investment than SP500 index as it's worst month in the last year, Mar 2018, returned -9.81% compared to -7.28% returned by SP500 index in Oct 2018. REX had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -17.28%. It is interesting to note that both REX and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Great businesses produce great results

REX 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 REX's volatility from 25 Sep, 2018 to 10 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 REX has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

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

On a general note (since you are interested in REX), two mid cap instruments that deserve special mention are LULU and SQ. They have significantly outperformed the overall market.

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