UNILEVER N V (FOREIGN)

55.49 +0.14 (+0.25%) Sell

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

13 min read

UN outperformed the broader market today. On a longer term basis, investors in UNILEVER N V (Foreign) made +0.03% per day. Friday's performance of +0.25% was a outperformance compared to it's daily average.

[Themes containing UN]

Buy-and-Hold investors in UN experienced a maximum drawdown of -7.28% over the last three months. It delivered -0.79% during this flat trending period. There were no long signals during this period, where the short signal generated profits of +0.79% for investors.

Trend

UN has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 26 Jan, 2017 to 8 Sep, 2017. Over the last 2 years 11 months and 3 days, UN outperformed the SP500 index on 49% days. Which indicates that on days UN outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months UN was mostly loss making and delivered on average -0.01% per day. It's best return during this period (of +3.62%) was on Friday, 19 Oct, 2018. While it's worst loss in the same period (of -2.52%) was on Thursday, 4 Oct, 2018. The longest stort-term trend during this period was 4 losing days, which started on 9 Oct, 2018 and ended on 12 Oct, 2018. This bearish trend lost -2.09% of investor capital.

The last 12 months saw UN's investors making profits in 6 months and incurring losses in 6 months. UN was less consistent in delivering monthly returs than SP500 index. UN was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -9.03% compared to -7.28% returned by SP500 index in Oct 2018. UN had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year. It is interesting to note that both UN and SP500 index significantly outperform during months when quarterly/annual results are announced.

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
-- Warren Buffett

UN is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in UN's volatility from 10 Sep, 2018 to 30 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 UN 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 UN. Therefore, SP500 must receive a lower allocation than UN in your portfolio. SP500 index usually has shorter drawdown period than UN.

Based on your interest in UN you may find it interesting to know that AMD is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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