Search for alternative investments is on for TMO investors as it underperforms
07 Dec, 201813 min read
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THERMO FISHER SCIENTIFIC INC. is a falling knife that can bleed you if you catch it on Friday. It delivered -2.55% to close at 235.86. It is currently trading +25% above it's 52 week low of 188.32 and is down only -6% from it's 52 week high.
TMO is currently in a bullish trend. Over the last three months Buy-and-Hold has been a better strategy (returning -0.56%) for TMO's investors than trading long signals.
TMO has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 24 Jan, 2017 to 29 Nov, 2018. Over the last 2 years 11 months and 3 days, TMO outperformed the SP500 index on 55% days.
TMO returned losses on 51% days in the last three months. During this time, it delivered on average 0.0% per day. It delivered it's best daily return of +4.37%, during this period, on Thursday, 25 Oct, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 30 Oct, 2018 and went on till 8 Nov, 2018. This bullish trend returned +7.34% to investors.
The last 12 months saw TMO's investors making profits in 6 months and incurring losses in 6 months. TMO was less consistent in delivering monthly returs than SP500 index. TMO significantly outperformed SP500 index in Jan 2018, when it returned +16.13% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. TMO had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both TMO and SP500 index significantly outperform during months when quarterly/annual results are announced.
"Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.
TMO 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 TMO's volatility from 10 Sep, 2018 to 25 Oct, 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 TMO has significant positive skewness in it's return distribution. This indicates that investors can expect TMO to recover from drawdowns quickly. Which makes TMO a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
TMO has more chance of extreme outcomes than the SP500 index. Therefore, TMO must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than TMO.
Based on your interest in TMO you may find it interesting to know that DPS has delivered similar performance as TMO and can be considered as an alternative investment candidate (to TMO).
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