SEDG is a falling knife, continues to bleed every investor trying to catch it
14 Dec, 201813 min read
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SEDG ranked among the worst performers today. On a longer term basis, investors in SOLAREDGE TECHNOLOGIES INC made +0.14% per day. Friday's performance of -0.52% was a underperformance compared to it's daily average.
Buy-and-Hold investors in SEDG experienced a maximum drawdown of -17.68% over the last three months. It delivered -8.95% during this bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +7.27%.
SEDG has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 6 Feb, 2017 to 14 May, 2018. Over the last 2 years 11 months and 10 days, SEDG outperformed the SP500 index on 51% days.
SEDG returned losses on 56% days in the last three months. During this time, it delivered on average -0.09% per day. It delivered it's worst daily return of -7.99%, during this period, on Friday, 2 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 21 Sep, 2018 and ended on 28 Sep, 2018. This bearish trend lost -12.47% of investor capital.
The last 12 months saw SEDG's investors making profits in 6 months and incurring losses in 6 months. SEDG was less consistent in delivering monthly returs than SP500 index. SEDG significantly outperformed SP500 index in Feb 2018, when it returned +39.42% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SEDG had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both SEDG and SP500 index significantly outperform during months when quarterly/annual results are announced.
Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.
-- Johann Wolfgang von Goethe
SEDG is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant fall in SEDG's volatility from 2 Nov, 2018 to 27 Nov, 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 SEDG 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 SEDG. Therefore, SP500 must receive a lower allocation than SEDG in your portfolio. SP500 index usually has shorter drawdown period than SEDG.
Based on your interest in SEDG you may find it interesting to know that MSFT and AMZN are both large caps that have shown remarkable performance and deserve to be on every investors' watchlist.
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