TERADYNE, INC

31.8 -0.69 (-2.18%) Sell

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

13 min read

TERADYNE, INC ranked among the worst performers on Monday. It fell by -2.18% to close at 31.8. On a day when the overall market breadth was 34%, it closed higher than 77% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing TER]

TER showed a strong bearish trend over the last 3 months. During this period TER fell by -15.15% and saw a maximum drawdown of -21.38%. There were 2 short signals during this period that returned a cumulative of +15.88% to investors.

Trend

TER has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 12 May, 2016 to 21 Mar, 2018. Over the last 2 years 11 months and 10 days, TER outperformed the SP500 index on 57% days.

During the last three months TER was mostly loss making and delivered on average -0.23% per day. It's best return during this period (of +8.47%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -6.12%) was on Wednesday, 24 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 3 Oct, 2018 and ended on 10 Oct, 2018. This bearish trend lost -12.27% of investor capital.

During the last year TER had 6 profitable months and 6 loss making months. TER returned profits in fewer months than SP500 index. TER was also a more risky investment than SP500 index as it's worst month in the last year, Apr 2018, returned -25.67% compared to -7.28% returned by SP500 index in Oct 2018. TER had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

Making money from enforcing patents is no more wrong than investing in preferred stock.
-- Nathan Myhrvold

TER is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in TER's volatility from 18 Sep, 2018 to 30 Oct, 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 TER has significant positive skewness in it's return distribution. This indicates that investors can expect TER to recover from drawdowns quickly. Which makes TER 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 TER. Therefore, SP500 must receive a lower allocation than TER in your portfolio. SP500 index usually has shorter drawdown period than TER.

On a general note (since you are interested in TER), two instruments that deserve special mention are AYTU and AMRH. They have significantly outperformed the overall market.

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