STAMPS.COM INC

168.3 -4.39 (-2.61%) Buy

STMP investors herd to book profits while the going is good

13 min read

STAMPS.COM INC has destroyed investor wealth on Tuesday. It delivered -2.61% to close at 168.3. It is currently trading -40% below it's 52 week high of 284.6.

[Themes containing STMP]

STMP showed a strong bearish trend over the last 3 months. During this period STMP delivered -29.24% and saw a maximum drawdown of -35.71%. There was a short signal during this period which returned +24.4%.

Trend

STMP has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 19 Jul, 2016 to 18 Jun, 2018. Over the last 2 years 11 months and 7 days, STMP outperformed the SP500 index on 54% days.

STMP 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 worst daily return of -9.74%, during this period, on Thursday, 1 Nov, 2018. The longest stort-term trend during this period was 9 losing days, which started on 7 Nov, 2018 and ended on 19 Nov, 2018. This bearish trend lost -15.06% of investor capital.

The last 12 months saw STMP's investors making profits in 6 months and incurring losses in 6 months. STMP was less consistent in delivering monthly returs than SP500 index. STMP significantly outperformed SP500 index in Apr 2018, when it returned +16.17% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. STMP had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both STMP and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Buy not on optimism, but on arithmetic.

STMP 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 STMP's volatility from 26 Sep, 2018 to 17 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 STMP 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.

Investors trading in STMP derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in STMP), three instruments that have performed similar to STMP are PAR, BVSN and WIX. They must all be evaluated as alternative investment options and for diversification.

Want to improve your Portfolio's performance?

Spotalpha's Portfolio optimizer is all you need to improve your returns and reduce your risk.
Optimize Portfolio NOW
Following
Symbol Price {{retType}} | Tr.
{{detail.symbol}} {{detail.close}} {{detail.priceChange}}  {{detail.pctChange}}%  {{detail.name}} {{detail.trend}} 
 
If you liked what you read here ...

... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.

All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.

We want to empower investors with all the tools and analysis required by them to make a rational investment decision.

If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute
Share with friends   WhatsApp   Facebook   Twitter