RANGE RESOURCES CORP

11.74 -0.99 (-8.42%) Sell

Don't invest in RRC now, it is an investor's nightmare

13 min read

RANGE RESOURCES CORP was among the worst performers on Friday. It lost -8.42% to close at 11.74. On a day when the overall market breadth was 35%, it closed higher than 84% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing RRC]

RRC showed a strong down trend over the last 3 months. During this period RRC lost -26.85% and saw a maximum drawdown of -36.47%. There were 2 short signals during this period that returned a cumulative of +12.14% to investors.

Trend

RRC has been underperforming the SP500 index in recent time, after having outperformed till 21 Jun, 2016. Over the last 2 years 11 months and 10 days, RRC underperformed the SP500 index on 52% days.

During the last three months RRC was mostly loss making and delivered on average -0.45% per day. It's best return during this period (of +7.2%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -8.42%) was on Friday, 14 Dec, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +10.66% to investors. This was followed by a bearish trend that started on 14 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -12.24% of investor capital.

RRC had 6 profitable and 6 loss making months over the last year. During the last year, RRC underperformed SP500 index on monthly return basis. RRC was also a more risky investment than SP500 index as it's worst month in the last year, Jan 2018, returned -20.48% compared to -7.28% returned by SP500 index in Oct 2018. RRC had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

"Everything is always feasible if you run a corporate finance exercise: you can always try to come out with a justification on how things could work. But the real issue is to say how do you translate that into practice.

RRC 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 RRC's volatility from 18 Sep, 2018 to 29 Oct, 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 RRC has significant negative skewness in it's return distribution. This indicates that RRC is very risky for short-term investment and can significantly underperform for long durations.

Investors trading in RRC derivatives at this moment can consider 'Bear Put Spread' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in RRC), AMZN is a large cap that deserves to be closely tracked for investment opportunities.

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