SOUTHERN COPPER CORP

32.68 +0.27 (+0.83%) Sell

SCCO does a dead cat bounce, it's still too early to buy into it

13 min read

SOUTHERN COPPER CORP delivered good returns today. It grew by +0.83% to close at 32.68. During the last week it returned -2.39% and saw a maximum drawdown of -3.83% before bouncing back.

[Themes containing SCCO]

SCCO is currently in a down trend. The current bearish signal has generated a profit of +18.38% for investors in the last three months.

Trend

SCCO has been underperforming the SP500 index in recent time, after having outperformed till 18 Apr, 2018. Over the last 2 years 11 months and 3 days, SCCO underperformed the SP500 index on 47% days. Which indicates that on days SCCO underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months SCCO was mostly loss making and delivered on average -0.29% per day. It's best return during this period (of +4.18%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -10.5%) was on Friday, 23 Nov, 2018. There was initially a bullish trend during this period which started on 18 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +7.48% to investors. This was followed by a bearish trend that started on 16 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -15.7% of investor capital.

On monthly basis, SCCO delivered losses in more months over the last year, than profits. SCCO delivered profits less regularly than SP500 index. SCCO was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -12.68% compared to -7.28% returned by SP500 index in Oct 2018. SCCO had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -39.04%. It is interesting to note that both SCCO and SP500 index significantly outperform during months when quarterly/annual results are announced.

All intelligent investing is value investing - acquiring more than you are paying for. You must value the business in order to value the stock .
-- Charles Thomas Munger

SCCO 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 SCCO's volatility from 10 Sep, 2018 to 28 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

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

On a general note (since you are interested in SCCO), three large cap instruments that deserve special mention are CSCO, V and AMZN. They have all outperformed the market and must be closely watched for investment opportunities.

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