47.73 -0.28 (-0.58%) Sell

Don't even consider investing in WIRE now, it is a risky investment

13 min read

ENCORE WIRE CORP has destroyed investor wealth on Friday. It delivered -0.58% to close at 47.73. It is currently trading -17% below it's 52 week high of 58.0.

[Themes containing WIRE]

WIRE showed a bearish trend over the last 3 months. During this period WIRE delivered -6.59% and saw a maximum drawdown of -19.65%. There were 2 short signals during this period that returned a cumulative of +5.47% to investors.


WIRE has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 3 Apr, 2018 to 24 Oct, 2018. Over the last 2 years 11 months and 10 days, WIRE outperformed the SP500 index on 53% days.

During the last three months WIRE was mostly loss making and delivered on average -0.09% per day. It's best return during this period (of +9.71%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -4.89%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 1 Nov, 2018 and went on till 7 Nov, 2018. This bullish trend returned +15.55% to investors.

The last 12 months saw WIRE's investors making profits in 6 months and incurring losses in 6 months. WIRE was less consistent in delivering monthly returs than SP500 index. WIRE significantly outperformed SP500 index in Nov 2018, when it returned +13.03% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. WIRE had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.
-- Charles Dickens

WIRE 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 WIRE's volatility from 25 Sep, 2018 to 1 Nov, 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 WIRE 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 WIRE. Therefore, SP500 must receive a lower allocation than WIRE in your portfolio. SP500 index usually has shorter drawdown period than WIRE.

Based on your interest in WIRE you may find it interesting to know that ABMD, LULU and AMD are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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