STARRETT L S CO

5.85 +0.76 (+12.93%) Sell

Waiting to invest in SCX? Consider it, because it managed to outperform the broader market

13 min read

SCX outperformed today. On a longer term basis, investors in STARRETT L S CO made +0.07% per day. Wednesday's performance of +12.93% was a outperformance compared to it's daily average.

[Themes containing SCX]

SCX showed a bearish trend over the last 3 months. During this period SCX delivered -5.19% and saw a maximum drawdown of -27.12%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in SCX till volatility reduces and a clear trend emerges.

Trend

SCX has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 10 Jun, 2016 to 30 Nov, 2018. Over the last 2 years 11 months and 8 days, SCX underperformed the SP500 index on 52% days.

SCX returned losses on 58% days in the last three months. During this time, it delivered on average -0.02% per day. It delivered it's best daily return of +12.93%, during this period, on Wednesday, 12 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 5 Oct, 2018 and ended on 12 Oct, 2018. This bearish trend lost -8.59% of investor capital.

The last 12 months saw SCX's investors making profits in 4 months and incurring losses in 8 months. SCX was less consistent in delivering monthly returs than SP500 index. SCX significantly outperformed SP500 index in Dec 2018, when it returned +25.81% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SCX had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Sep 2018 to Nov 2018) during which period it delivered -34.7%. It is interesting to note that both SCX and SP500 index significantly outperform during months when quarterly/annual results are announced.

Bottoms in the investment world don't end with four-year lows; they end with 10- or 15-year lows.
-- Jim Rogers

SCX 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 fall in SCX's volatility from 13 Sep, 2018 to 22 Oct, 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 SCX 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 SCX. Therefore, SP500 must receive a lower allocation than SCX in your portfolio. SP500 index usually has shorter drawdown period than SCX.

Based on your interest in SCX you may find it interesting to know that NSPR, APRN and AYTU have all shown remarkable performance and qualify to be on every investor's watchlist.

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