WORTHINGTON INDUSTRIES INC

37.53 -0.09 (-0.24%) Sell

WOR is a falling knife, continues to bleed every investor trying to catch it

13 min read

WORTHINGTON INDUSTRIES INC has destroyed investor wealth on Thursday. It returned -0.24% to close at 37.53. On a day when the overall market breadth was 35%, it closed higher than 13% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing WOR]

Buy-and-Hold investors in WOR experienced a maximum drawdown of -19.44% over the last three months. It returned -16.93% 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 +8.76%.

Trend

WOR has been underperforming the SP500 index in recent time, after having outperformed till 22 Nov, 2016. Over the last 2 years 11 months and 9 days, WOR underperformed the SP500 index on 48% days. Which indicates that on days WOR underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months WOR was mostly loss making and delivered on average -0.27% per day. It's best return during this period (of +3.55%) was on Monday, 8 Oct, 2018. While it's worst loss in the same period (of -8.21%) was on Wednesday, 26 Sep, 2018. There was initially a bullish trend during this period which started on 30 Oct, 2018 and went on till 7 Nov, 2018. The bullish trend returned +11.15% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -5.92% of investor capital.

On monthly basis, WOR delivered losses in more months over the last year, than profits. WOR delivered profits less regularly than SP500 index. WOR was also a more risky investment than SP500 index as it's worst month in the last year, Jun 2018, returned -12.47% compared to -7.28% returned by SP500 index in Oct 2018. WOR had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -22.29%. It is interesting to note that both WOR and SP500 index significantly outperform during months when quarterly/annual results are announced.

When buying shares, ask yourself, would you buy the whole company?
-- Rene Rivkin

WOR 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 WOR's volatility from 21 Sep, 2018 to 7 Dec, 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 WOR 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 WOR. Therefore, SP500 must receive a lower allocation than WOR in your portfolio. SP500 index usually has shorter drawdown period than WOR.

Based on your interest in WOR you may find it interesting to know that OPNT, IX and ICPT are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.

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