18.55 +0.34 (+1.81%) Buy

Don't cash in on SEM now, it outperformed most of it's peers

13 min read

SEM outperformed the broader market today. On a longer term basis, investors in SELECT MEDICAL HOLDINGS CORP made 0.0% per day. Tuesday's performance of +1.81% was a outperformance compared to it's daily average.

[Themes containing SEM]

SEM showed a bullish trend over the last 3 months. During this period SEM increased by +1.92% and saw a maximum drawdown of -13.24%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in SEM till volatility reduces and a clear trend emerges.


SEM has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 12 Feb, 2016 to 26 Jul, 2018. Over the last 2 years 11 months and 7 days, SEM outperformed the SP500 index on 51% days.

During the last three months SEM delivered losses on 61% days. However, it still managed to end this period in a profit. It's best return during this period (of +20.62%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -4.14%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 5 losing days, which started on 1 Oct, 2018 and ended on 5 Oct, 2018. This bearish trend lost -5.26% of investor capital.

The last 12 months saw SEM's investors making profits in 6 months and incurring losses in 6 months. SEM was less consistent in delivering monthly returs than SP500 index. SEM significantly outperformed SP500 index in Nov 2018, when it returned +16.89% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SEM 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 SEM and SP500 index significantly outperform during months when quarterly/annual results are announced.

Believe you can and you're halfway there.
-- Theodore Roosevelt

SEM 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 surge in SEM's volatility from 25 Sep, 2018 to 2 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

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

On a general note (since you are interested in SEM), AYTU has performed really well and deserves to be closely tracked for investment opportunities.

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