67.57 -2.91 (-4.31%) Sell

Don't even consider investing in SWKS now, it is a risky investment

13 min read

SWKS is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in SKYWORKS SOLUTIONS, INC. made -0.06% per day. Friday's performance of -4.31% was a significant underperformance compared to it's daily average.

[Themes containing SWKS]

SWKS showed a strong down trend over the last 3 months. During this period SWKS lost -22.48% and saw a maximum drawdown of -27.48%. There was a short signal during this period which returned +22.48%.


SWKS has been underperforming the SP500 index in recent time, after having outperformed till 8 Jun, 2017. Over the last 2 years 11 months and 3 days, SWKS underperformed the SP500 index on 47% days. Which indicates that on days SWKS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months SWKS was mostly loss making and delivered on average -0.37% per day. It's best return during this period (of +3.43%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -8.08%) was on Friday, 9 Nov, 2018. There was initially a bullish trend during this period which started on 18 Sep, 2018 and went on till 24 Sep, 2018. The bullish trend returned +7.84% to investors. This was followed by a bearish trend that started on 9 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -15.21% of investor capital.

SWKS had 2 profitable and 10 loss making months over the last year. During the last year, SWKS underperformed SP500 index on monthly return basis. SWKS was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -16.12% compared to -7.28% returned by SP500 index in Oct 2018. SWKS had a longer winning streak of losing months than SP500 index. It went down in 7 straight months (from Jun 2018 to Dec 2018) during which period it delivered -37.07%.

It's not the employer who pays the wages. Employers only handle the money. It's the customer who pays the wages.
-- Henry Ford

SWKS 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 SWKS's volatility from 10 Sep, 2018 to 13 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that SWKS 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 SWKS derivatives at this moment can consider 'Bear Put Spread' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in SWKS), NFEC has performed really well this year and deserves to be closely tracked for investment opportunities.

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