SENS shows sign of weakness as investors do cost averaging
12 Dec, 201813 min read
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SENSEONICS HOLDINGS, INC. managed to outperform the broader market on Wednesday. It surged by +1.0% to close at 3.03. On a day when the overall market breadth was 35%, it closed higher than 75% of the market. In comparison, the benchmark SP500 index closed today at +0.54%.
Buy-and-Hold investors in SENS experienced a maximum drawdown of -42.36% over the last three months. It delivered -32.67% during this strong 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 +4.11%.
SENS has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 28 Jun, 2016 to 15 Jun, 2017. Over the last 2 years 11 months and 8 days, SENS underperformed the SP500 index on 54% days.
SENS returned losses on 62% days in the last three months. During this time, it delivered on average -0.5% per day. It delivered it's best daily return of +17.34%, during this period, on Tuesday, 23 Oct, 2018. The longest stort-term trend during this period was 10 losing days, which started on 28 Sep, 2018 and ended on 11 Oct, 2018. This bearish trend lost -33.41% of investor capital.
The last 12 months saw SENS's investors making profits in 6 months and incurring losses in 6 months. SENS was less consistent in delivering monthly returs than SP500 index. SENS significantly outperformed SP500 index in Jun 2018, when it returned +23.8% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SENS had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -37.52%.
I always said that if I wasn't studying psychopaths in prison, I'd do it at the stock exchange.
-- Robert D. Hare
SENS 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 SENS's volatility from 14 Sep, 2018 to 4 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 SENS 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 SENS. Therefore, SP500 must receive a lower allocation than SENS in your portfolio. SP500 index usually has shorter drawdown period than SENS.
Based on your interest in SENS you may find it interesting to know that EPIX and AMRH have both shown remarkable performance and deserve to be on every investors' watchlist.
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