UNIT is a falling knife, continues to bleed every investor trying to catch it
14 Dec, 201813 min read
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UNITI GROUP INC. ranked among the worst performers on Friday. It lost -3.57% to close at 17.27. On a day when the overall market breadth was 35%, it closed higher than 75% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.
Buy-and-Hold investors in UNIT experienced a maximum drawdown of -17.41% over the last three months. It lost -16.41% 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.
UNIT has been underperforming the SP500 index in recent time, after having outperformed till 26 Sep, 2016. Over the last 2 years 11 months and 10 days, UNIT underperformed the SP500 index on 48% days. Which indicates that on days UNIT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
UNIT returned losses on 54% days in the last three months. During this time, it delivered on average -0.26% per day. It delivered it's worst daily return of -8.18%, during this period, on Wednesday, 12 Dec, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 8 Oct, 2018. The trend delivered -5.26% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 5 Nov, 2018. This bullish trend delivered +7.44% to investors.
UNIT had 5 profitable and 7 loss making months over the last year. During the last year, UNIT underperformed SP500 index on monthly return basis. UNIT significantly outperformed SP500 index in Aug 2018, when it returned +17.76% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. UNIT had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.
It takes as much energy to wish as it does to plan.
-- Eleanor Roosevelt
UNIT 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 UNIT's volatility from 3 Oct, 2018 to 30 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 UNIT has significant positive skewness in it's return distribution. This indicates that investors can expect UNIT to recover from drawdowns quickly. Which makes UNIT a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
UNIT has more chance of extreme outcomes than the SP500 index. Therefore, UNIT must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than UNIT.
On a general note (since you are interested in UNIT), AAXN is a small cap that deserves to be closely tracked for investment opportunities.
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