VALMONT INDUSTRIES INC

116.39 -0.24 (-0.21%) Sell

VMI investors take a massive hit

13 min read

VALMONT INDUSTRIES INC was among the worst performers on Tuesday. It lost -0.21% to close at 116.39. It is currently trading -31% below it's 52 week high of 171.1.

[Themes containing VMI]

Buy-and-Hold investors in VMI experienced a maximum drawdown of -19.05% over the last three months. It lost -15.41% 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. The net profit from Short signals was +9.48%.

Trend

VMI has been underperforming the SP500 index in recent time, after having outperformed till 8 Dec, 2016. Over the last 2 years 11 months and 7 days, VMI underperformed the SP500 index on 49% days. Which indicates that on days VMI underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months VMI was mostly loss making and delivered on average -0.25% per day. It's best return during this period (of +4.06%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -9.65%) was on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 26 Oct, 2018 and went on till 8 Nov, 2018. The bullish trend returned +16.92% to investors. This was followed by a bearish trend that started on 3 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -11.3% of investor capital.

VMI had 5 profitable and 7 loss making months over the last year. During the last year, VMI underperformed SP500 index on monthly return basis. VMI was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -10.84% compared to -7.28% returned by SP500 index in Oct 2018. VMI had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

"I grew up in Finance.

VMI 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 VMI's volatility from 25 Sep, 2018 to 26 Oct, 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 VMI 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 VMI. Therefore, SP500 must receive a lower allocation than VMI in your portfolio. SP500 index usually has shorter drawdown period than VMI.

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

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