17.48 -0.02 (-0.11%) Sell

Don't consider investing in WRD now, it is risky at the moment

13 min read

WILDHORSE RESOURCE DEVELOPMENT CORP ranked worse than it's peers on Friday. It returned -0.11% to close at 17.48. On a day when the overall market breadth was 35%, it closed higher than 5% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing WRD]

WRD showed a down trend over the last 3 months. During this period WRD returned -8.67% and saw a maximum drawdown of -27.98%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in WRD till volatility reduces and a clear trend emerges.


WRD has been underperforming the SP500 index in recent time, after having outperformed till 9 May, 2018. Over the last 1 year and 12 months, WRD underperformed the SP500 index on 48% days. Which indicates that on days WRD underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

WRD was profitable on 50% days in the last three months. During this time, it delivered on average -0.08% per day. It delivered it's best daily return of +8.21%, during this period, on Wednesday, 31 Oct, 2018. There was initially a bullish trend during this period which started on 10 Sep, 2018 and went on till 13 Sep, 2018. The bullish trend returned +8.2% to investors. This was followed by a bearish trend that started on 19 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -14.9% of investor capital.

On monthly basis, WRD delivered losses in more months over the last year, than profits. WRD delivered profits less regularly than SP500 index. WRD significantly outperformed SP500 index in Apr 2018, when it returned +43.84% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. WRD had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

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WRD is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in WRD's volatility from 2 Oct, 2018 to 30 Oct, 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 WRD has significant positive skewness in it's return distribution. This indicates that investors can expect WRD to recover from drawdowns quickly. Which makes WRD a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in WRD), three instruments that deserve special mention are AMRH, AYTU and EPIX. They have all outperformed the market and must be closely watched for investment opportunities.

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