RPM shows sign of weakness as investors do cost averaging
12 Dec, 201813 min read
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RPM INTERNATIONAL INC is looking better than most other alternatives today. It grew by +0.51% to close at 60.84. It's recent 5 day performance has been -0.43%, -0.12%, -2.78%, -2.34% and -1.97%.
RPM showed a strong down trend over the last 3 months. During this period RPM returned -10.6% and saw a maximum drawdown of -13.98%. There were 3 short signals during this period that returned a cumulative of +2.52% to investors.
RPM has been underperforming the SP500 index in recent time, after having outperformed till 7 Sep, 2016. Over the last 2 years 11 months and 8 days, RPM outperformed the SP500 index on 53% days.
During the last three months RPM was mostly loss making and delivered on average -0.17% per day. It's best return during this period (of +5.2%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -5.39%) was on Wednesday, 3 Oct, 2018. There was initially a bearish trend during this period which started on 21 Sep, 2018 and went on till 4 Oct, 2018. The trend delivered -11.99% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 7 Nov, 2018. This bullish trend delivered +8.46% to investors.
On monthly basis, RPM delivered profits and losses in equal number of months. RPM delivered profits less regularly than SP500 index. RPM significantly outperformed SP500 index in Jun 2018, when it returned +17.82% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. RPM had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both RPM and SP500 index significantly outperform during months when quarterly/annual results are announced.
If all the economists were laid end to end, they'd never reach a conclusion.
-- George Bernard Shaw
RPM 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 surge in RPM's volatility from 21 Sep, 2018 to 7 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that RPM has significant positive skewness in it's return distribution. This indicates that investors can expect RPM to recover from drawdowns quickly. Which makes RPM 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 RPM. Therefore, SP500 must receive a lower allocation than RPM in your portfolio. SP500 index usually has shorter drawdown period than RPM.
On a general note (since you are interested in RPM), MSFT is a large cap that deserves to be closely tracked for investment opportunities.
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