Waiting to invest in SGC? Avoid at the moment as it is a falling knife that can bleed you if you catch it
11 Dec, 201813 min read
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SUPERIOR GROUP OF COMPANIES, INC. is a falling knife that can bleed you if you catch it on Tuesday. It delivered -3.96% to close at 18.19. It is currently trading -35% below it's 52 week high of 28.25.
SGC showed a bearish trend over the last 3 months. During this period SGC delivered -2.83% and saw a maximum drawdown of -13.07%. There was a short signal during this period which returned +2.83%.
SGC has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 18 Dec, 2017 to 11 Sep, 2018. Over the last 2 years 11 months and 7 days, SGC underperformed the SP500 index on 48% days. Which indicates that on days SGC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months SGC was mostly loss making and delivered on average -0.03% per day. It's best return during this period (of +4.4%) was on Thursday, 8 Nov, 2018. While it's worst loss in the same period (of -5.86%) was on Tuesday, 4 Dec, 2018. The longest stort-term trends during this period were 3 profitable and losing days. The bullish trend (which returned +2.24%) started on 13 Sep, 2018 and went on till 17 Sep, 2018 while the bearish trend (which returned -4.91%) started on 25 Sep, 2018 and went on till 27 Sep, 2018.
The last 12 months saw SGC's investors making profits in 6 months and incurring losses in 6 months. SGC was less consistent in delivering monthly returs than SP500 index. SGC was also a more risky investment than SP500 index as it's worst month in the last year, Jun 2018, returned -12.43% compared to -7.28% returned by SP500 index in Oct 2018. SGC had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.
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
SGC 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 surge in SGC's volatility from 13 Sep, 2018 to 4 Dec, 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 SGC 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 SGC. Therefore, SP500 must receive a lower allocation than SGC in your portfolio. SP500 index usually has shorter drawdown period than SGC.
On a general note (since you are interested in SGC), HQY is a small cap that deserves to be closely tracked for investment opportunities.
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