50.3 -0.88 (-1.76%) Sell

Stop-loss on the minds of TXT investors as it ranked among the worst performers

13 min read

TEXTRON INC has destroyed investor wealth on Tuesday. It lost -1.76% to close at 50.3 which is it's 52 week low, down -30% from it's 52 week high.

[Themes containing TXT]

Buy-and-Hold investors in TXT experienced a maximum drawdown of -30.43% over the last three months. It lost -28.0% 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 +22.7%.


TXT has been underperforming the SP500 index in recent time, after having outperformed till 8 Oct, 2018. Over the last 2 years 11 months and 7 days, TXT underperformed the SP500 index on 49% days. Which indicates that on days TXT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

TXT returned losses on 55% days in the last three months. During this time, it delivered on average -0.5% per day. It delivered it's worst daily return of -11.25%, during this period, on Thursday, 18 Oct, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 19 Sep, 2018. The bullish trend returned +2.64% to investors. This was followed by a bearish trend that started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -22.42% of investor capital.

TXT had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of TXT and SP500 index were the same. TXT was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -25.28% compared to -7.28% returned by SP500 index in Oct 2018. TXT 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 TXT and SP500 index significantly outperform during months when quarterly/annual results are announced.

"You have venture capitalists. We view them as experts who also help finance your company and give directions and also some pretty candid discussions about what you have to do better.

TXT is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in TXT's volatility from 14 Sep, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that TXT has significant positive skewness in it's return distribution. This indicates that investors can expect TXT to recover from drawdowns quickly. Which makes TXT 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 TXT. Therefore, SP500 must receive a lower allocation than TXT in your portfolio. SP500 index usually has shorter drawdown period than TXT.

Based on your interest in TXT you may find it interesting to know that TWTR and ABMD are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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