Are you evaluating investing in UFI? Wait as it underperformed
17 Dec, 201813 min read
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UNIFI INC underperformed on Monday. It lost 0.0% to close at 23.36. On a day when the overall market breadth was 34%, it closed higher than 12% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
UFI showed a strong down trend over the last 3 months. During this period UFI lost -18.18% and saw a maximum drawdown of -20.82%. There was a short signal during this period which returned +18.18%.
UFI has been underperforming the SP500 index in recent time, after having outperformed till 9 Dec, 2016. Over the last 2 years 11 months and 10 days, UFI underperformed the SP500 index on 51% days.
UFI returned losses on 57% days in the last three months. During this time, it delivered on average -0.29% per day. It delivered it's best daily return of +13.15%, during this period, on Thursday, 1 Nov, 2018. There was initially a bullish trend during this period which started on 1 Nov, 2018 and went on till 7 Nov, 2018. The bullish trend returned +17.19% to investors. This was followed by a bearish trend that started on 30 Nov, 2018 and ended on 11 Dec, 2018. This bearish trend lost -14.4% of investor capital.
UFI had 5 profitable and 7 loss making months over the last year. During the last year, UFI underperformed SP500 index on monthly return basis. UFI significantly outperformed SP500 index in Nov 2018, when it returned +21.32% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. UFI had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year.
"There can be no rise in the value of labour without a fall of profits.
UFI 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 UFI's volatility from 25 Sep, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that UFI has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
SP500 index has more chance of extreme outcomes than UFI. Therefore, SP500 must receive a lower allocation than UFI in your portfolio. SP500 index usually has shorter drawdown period than UFI.
Based on your interest in UFI you may find it interesting to know that ALB has delivered similar performance as UFI and can be considered as an alternative investment candidate (to UFI).
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