RUTHS HOSPITALITY GROUP, INC.

22.56 -0.08 (-0.35%) Sell

Don't consider investing in RUTH now, it is risky at the moment

13 min read

RUTH trailed the broader market today. On a longer term basis, investors in RUTHS HOSPITALITY GROUP, INC. made +0.09% per day. Monday's performance of -0.35% was a significant underperformance compared to it's daily average.

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RUTH showed a strong down trend over the last 3 months. During this period RUTH returned -26.39% and saw a maximum drawdown of -28.49%. There was a short signal during this period which returned +18.23%.

Trend

RUTH has been underperforming the SP500 index in recent time, after having outperformed till 10 Aug, 2018. Over the last 2 years 11 months and 10 days, RUTH outperformed the SP500 index on 51% days.

During the last three months RUTH was mostly loss making and delivered on average -0.48% per day. It's best return during this period (of +3.13%) was on Tuesday, 6 Nov, 2018. While it's worst loss in the same period (of -4.49%) was on Friday, 16 Nov, 2018. There was initially a bullish trend during this period which started on 25 Sep, 2018 and went on till 28 Sep, 2018. The bullish trend returned +3.09% to investors. This was followed by a bearish trend that started on 15 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -10.12% of investor capital.

On monthly basis, RUTH delivered profits in more months over the last year, than losses. RUTH delivered profits less regularly than SP500 index. RUTH was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -12.81% compared to -7.28% returned by SP500 index in Oct 2018. RUTH had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both RUTH and SP500 index significantly outperform during months when quarterly/annual results are announced.

The challenge is not to pick the best investment. The challenge is to pick the right investment.
-- Don Connelly

RUTH is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in RUTH's volatility from 26 Sep, 2018 to 5 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that RUTH 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 RUTH. Therefore, SP500 must receive a lower allocation than RUTH in your portfolio. SP500 index usually has shorter drawdown period than RUTH.

Based on your interest in RUTH you may find it interesting to know that NFEC has shown remarkable performance this year and deserves to be on every investors' watchlist.

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