UEIC is a falling knife, continues to bleed every investor trying to catch it
14 Dec, 201813 min read
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UNIVERSAL ELECTRONICS INC significantly underperformed on Friday. It returned -6.41% to close at 27.72. It is currently trading -49% below it's 52 week high of 55.4.
UEIC is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +22.71% for investors.
UEIC has been underperforming the SP500 index in recent time, after having outperformed till 17 Aug, 2016. Over the last 2 years 11 months and 10 days, UEIC underperformed the SP500 index on 52% days.
During the last three months UEIC was mostly loss making and delivered on average -0.53% per day. It's best return during this period (of +16.2%) was on Friday, 9 Nov, 2018. While it's worst loss in the same period (of -6.82%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -14.45% losses to investors. This was followed by a bullish trend that started on 12 Oct, 2018 and ended on 16 Oct, 2018. This bullish trend delivered +6.36% to investors.
On monthly basis, UEIC delivered profits and losses in equal number of months. UEIC delivered profits less regularly than SP500 index. UEIC was also a more risky investment than SP500 index as it's worst month in the last year, May 2018, returned -35.96% compared to -7.28% returned by SP500 index in Oct 2018. UEIC had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.
Let's not allow the voice of the people to be overwhelmed by the siren song of those who opposed regulation, who demanded that government should stand aside and let finance and business run the show.
-- David Blunkett
UEIC 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 UEIC's volatility from 28 Sep, 2018 to 24 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 UEIC has significant positive skewness in it's return distribution. This indicates that investors can expect UEIC to recover from drawdowns quickly. Which makes UEIC 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 UEIC. Therefore, SP500 must receive a lower allocation than UEIC in your portfolio. SP500 index usually has shorter drawdown period than UEIC.
On a general note (since you are interested in UEIC), three mid cap instruments that deserve special mention are SQ, LULU and ABMD. They have all outperformed the market and must be closely watched for investment opportunities.
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