TETRA TECH INC

54.56 +0.39 (+0.72%) Sell

TTEK does a dead cat bounce, it's still too early to buy into it

13 min read

TETRA TECH INC delivered stellar performance on Friday. It gained +0.72% to close at 54.56. It is currently trading -24% below it's 52 week high of 72.33.

[Themes containing TTEK]

Buy-and-Hold investors in TTEK experienced a maximum drawdown of -25.6% over the last three months. It returned -23.26% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +14.35%.

Trend

TTEK has been underperforming the SP500 index in recent time, after having outperformed till 8 Nov, 2018. Over the last 2 years 11 months and 10 days, TTEK outperformed the SP500 index on 53% days.

TTEK returned losses on 58% days in the last three months. During this time, it delivered on average -0.4% per day. It delivered it's worst daily return of -6.39%, during this period, on Tuesday, 4 Dec, 2018. There was initially a bullish trend during this period which started on 2 Nov, 2018 and went on till 8 Nov, 2018. The bullish trend returned +10.29% 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 -10.56% of investor capital.

On monthly basis, TTEK delivered losses in more months over the last year, than profits. TTEK delivered profits less regularly than SP500 index. TTEK significantly outperformed SP500 index in Aug 2018, when it returned +14.8% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. TTEK had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year. It is interesting to note that both TTEK and SP500 index significantly outperform during months when quarterly/annual results are announced.

The stock market clearly values companies that can deliver disruptive innovation.
-- Steve Blank

TTEK 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 TTEK's volatility from 18 Sep, 2018 to 10 Dec, 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 TTEK has significant positive skewness in it's return distribution. This indicates that investors can expect TTEK to recover from drawdowns quickly. Which makes TTEK 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 TTEK. Therefore, SP500 must receive a lower allocation than TTEK in your portfolio. SP500 index usually has shorter drawdown period than TTEK.

On a general note (since you are interested in TTEK), two instruments that have delivered similar performance as TTEK are CCMP and SNA. They are suitable as good alternative investment candidates that can diversify your portfolio.

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