37.82 -0.45 (-1.2%) Buy

SSTK investors check their stop-losses as it underperforms

13 min read

SHUTTERSTOCK, INC. is a falling knife that can bleed you if you catch it on Tuesday. It lost -1.2% to close at 37.82. On a day when the overall market breadth was 35%, it closed higher than 66% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing SSTK]

Buy-and-Hold investors in SSTK experienced a maximum drawdown of -32.23% over the last three months. It lost -30.73% during this strong down 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 +24.35%.


SSTK has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 7 days, SSTK underperformed the SP500 index on 45% days. Which indicates that on days SSTK underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

SSTK returned losses on 65% days in the last three months. During this time, it delivered on average -0.55% per day. It delivered it's worst daily return of -12.63%, during this period, on Tuesday, 30 Oct, 2018. There was initially a bearish trend during this period which started on 1 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -15.87% losses to investors. This was followed by a bullish trend that started on 13 Nov, 2018 and ended on 16 Nov, 2018. This bullish trend delivered +3.98% to investors.

SSTK had 5 profitable and 7 loss making months over the last year. During the last year, SSTK underperformed SP500 index on monthly return basis. SSTK was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -25.06% compared to -7.28% returned by SP500 index in Oct 2018. SSTK had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -33.45%.

If you totally want to reduce risk, take no risk. Bury the money. Then you've got no risk at all.
-- Don Connelly

SSTK 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 SSTK's volatility from 13 Sep, 2018 to 30 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 SSTK has significant positive skewness in it's return distribution. This indicates that investors can expect SSTK to recover from drawdowns quickly. Which makes SSTK a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than SSTK. Therefore, SP500 must receive a lower allocation than SSTK in your portfolio. SP500 index usually has shorter drawdown period than SSTK.

Based on your interest in SSTK you may find it interesting to know that BURL, AAXN and HQY are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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