ADVANCED DRAINAGE SYSTEMS, INC.

24.9 -0.33 (-1.31%) Sell

WMS investors hurt by serious losses

13 min read

ADVANCED DRAINAGE SYSTEMS, INC. is a falling knife that can bleed you if you catch it on Tuesday. It fell by -1.31% to close at 24.9. It is currently trading -24% below it's 52 week high of 33.1.

[Themes containing WMS]

WMS is currently in a bearish trend. The current bearish signal has generated a profit of +17.0% for investors in the last three months.

Trend

WMS has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 11 Jul, 2016 to 20 Oct, 2017. Over the last 2 years 11 months and 7 days, WMS underperformed the SP500 index on 50% days. Which indicates that on days WMS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months WMS was mostly loss making and delivered on average -0.36% per day. It's best return during this period (of +3.71%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -5.37%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -10.91% of investor capital.

During the last year WMS had 6 profitable months and 6 loss making months. WMS returned profits in fewer months than SP500 index. WMS significantly outperformed SP500 index in May 2018, when it returned +15.08% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. WMS had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

"Price is what you pay and value is what you get.

WMS is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in WMS's volatility from 13 Sep, 2018 to 12 Nov, 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 WMS 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 WMS. Therefore, SP500 must receive a lower allocation than WMS in your portfolio. SP500 index usually has shorter drawdown period than WMS.

On a general note (since you are interested in WMS), if you are evaluating WMS as an investment candidate, then you should read about CUBI which has delivered similar performance and can help diversify your portfolio.

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