4.37 -0.17 (-3.96%) Sell

Prayers for STKL investors as it delivered massive losses

13 min read

SUNOPTA INC. ranked among the worst performers on Thursday. It delivered -3.96% to close at 4.37. On a day when the overall market breadth was 35%, it closed higher than 70% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing STKL]

Buy-and-Hold investors in STKL experienced a maximum drawdown of -44.36% over the last three months. It delivered -40.95% 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 +30.22%.


STKL has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 30 Jun, 2017 to 16 Nov, 2018. Over the last 2 years 11 months and 9 days, STKL underperformed the SP500 index on 52% days.

During the last three months STKL was mostly loss making and delivered on average -0.77% per day. It's best return during this period (of +14.29%) was on Tuesday, 27 Nov, 2018. While it's worst loss in the same period (of -13.5%) was on Wednesday, 7 Nov, 2018. The longest stort-term trend during this period was 6 losing days, which started on 2 Nov, 2018 and ended on 9 Nov, 2018. This bearish trend lost -34.25% of investor capital.

The last 12 months saw STKL's investors making profits in 4 months and incurring losses in 8 months. STKL was less consistent in delivering monthly returs than SP500 index. STKL was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -36.52% compared to -7.28% returned by SP500 index in Oct 2018. STKL had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jul 2018 to Sep 2018) during which period it delivered -13.01%. It is interesting to note that both STKL and SP500 index significantly outperform during months when quarterly/annual results are announced.

Never spend your money before you have it.
-- Thomas Jefferson

STKL 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 STKL's volatility from 10 Oct, 2018 to 7 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 STKL 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 STKL. Therefore, SP500 must receive a lower allocation than STKL in your portfolio. SP500 index usually has shorter drawdown period than STKL.

On a general note (since you are interested in STKL), two large cap instruments that deserve special mention are MSFT and UNH. They have significantly outperformed the overall market.

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