22.44 -0.39 (-1.75%) Sell

STN is a falling knife, continues to bleed every investor trying to catch it

13 min read

STN ranked among the worst performers today. On a longer term basis, investors in STANTEC INC (Foreign) made +0.02% per day. Friday's performance of -1.75% was a significant underperformance compared to it's daily average.

[Themes containing STN]

STN showed a strong down trend over the last 3 months. During this period STN returned -10.6% and saw a maximum drawdown of -15.48%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in STN till volatility reduces and a clear trend emerges.


STN has been underperforming the SP500 index in recent time, after having outperformed till 5 Feb, 2016. Over the last 2 years 11 months and 10 days, STN underperformed the SP500 index on 50% days. Which indicates that on days STN underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months STN was mostly loss making and delivered on average -0.16% per day. It's best return during this period (of +5.7%) was on Monday, 22 Oct, 2018. While it's worst loss in the same period (of -6.77%) was on Friday, 9 Nov, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 1 Nov, 2018. The bullish trend returned +5.19% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -13.35% of investor capital.

On monthly basis, STN delivered losses in more months over the last year, than profits. STN delivered profits less regularly than SP500 index. STN was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -13.43% compared to -7.28% returned by SP500 index in Oct 2018. STN 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 STN and SP500 index significantly outperform during months when quarterly/annual results are announced.

"All intelligent investing is value investing - acquiring more that you are paying for. You must value the business in order to value the stock.

STN is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in STN's volatility from 17 Sep, 2018 to 12 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 STN 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 STN. Therefore, SP500 must receive a lower allocation than STN in your portfolio. SP500 index usually has shorter drawdown period than STN.

On a general note (since you are interested in STN), two instruments that deserve special mention are TNDM and HEAR. They have significantly outperformed the overall market this year.

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