10.72 -0.34 (-3.16%) Sell

VSTO investors disappointed by market underperformance

13 min read

VISTA OUTDOOR INC. significantly underperformed on Friday. It returned -3.16% to close at 10.72. It is currently trading -46% below it's 52 week high of 19.94.

[Themes containing VSTO]

Buy-and-Hold investors in VSTO experienced a maximum drawdown of -41.98% over the last three months. It returned -41.71% 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 +37.89%.


VSTO has been underperforming the SP500 index in recent time, after having outperformed till 4 Mar, 2016. Over the last 2 years 11 months and 3 days, VSTO underperformed the SP500 index on 50% days. Which indicates that on days VSTO underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months VSTO was mostly loss making and delivered on average -0.82% per day. It's best return during this period (of +11.76%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -5.18%) was on Monday, 19 Nov, 2018. There was initially a bullish trend during this period which started on 19 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +2.45% to investors. This was followed by a bearish trend that started on 8 Oct, 2018 and ended on 15 Oct, 2018. This bearish trend lost -6.15% of investor capital.

On monthly basis, VSTO delivered profits and losses in equal number of months. VSTO delivered profits less regularly than SP500 index. VSTO was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -28.41% compared to -7.28% returned by SP500 index in Oct 2018. VSTO had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -46.31%. It is interesting to note that both VSTO and SP500 index significantly outperform during months when quarterly/annual results are announced.

If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.
-- Edmund Burke

VSTO 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 VSTO's volatility from 10 Sep, 2018 to 5 Nov, 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 VSTO has positive skewness in it's return distribution. This indicates that investors can expect VSTO to make attempts to recover from drawdowns quickly. Which makes VSTO a good candidate for momentum based trading on short-term bullish trends or counter-trends.

SP500 index has more chance of extreme outcomes than VSTO. Therefore, SP500 must receive a lower allocation than VSTO in your portfolio. VSTO usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in VSTO), EPIX has performed really well and deserves to be closely tracked for investment opportunities.

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