SKYW is a falling knife, continues to bleed every investor trying to catch it
14 Dec, 201813 min read
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SKYW was among the worst performers today. On a longer term basis, investors in SKYWEST INC made -0.08% per day. Friday's performance of -1.14% was a significant underperformance compared to it's daily average.
SKYW showed a strong down trend over the last 3 months. During this period SKYW lost -25.28% and saw a maximum drawdown of -25.28%. There were 3 short signals during this period that returned a cumulative of +4.52% to investors.
SKYW has been underperforming the SP500 index in recent time, after having outperformed till 31 Aug, 2018. Over the last 2 years 11 months and 10 days, SKYW outperformed the SP500 index on 52% days.
During the last three months SKYW was mostly loss making and delivered on average -0.42% per day. It's best return during this period (of +11.76%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -7.89%) was on Thursday, 13 Dec, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -9.62% losses to investors. This was followed by a bullish trend that started on 25 Oct, 2018 and ended on 31 Oct, 2018. This bullish trend delivered +20.43% to investors.
SKYW had 7 profitable and 5 loss making months over the last year. During the last year, SKYW underperformed SP500 index on monthly return basis. SKYW was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -21.76% compared to -7.28% returned by SP500 index in Oct 2018. SKYW 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 SKYW and SP500 index significantly outperform during months when quarterly/annual results are announced.
"The real measure of your wealth is how much you'd be worth if you lost all your money
SKYW is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in SKYW's volatility from 17 Sep, 2018 to 1 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 SKYW 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 SKYW. Therefore, SP500 must receive a lower allocation than SKYW in your portfolio. SP500 index usually has shorter drawdown period than SKYW.
On a general note (since you are interested in SKYW), if you are evaluating SKYW as an investment candidate, then you should read about TRN which has delivered similar performance and can help diversify your portfolio.
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