WATTS WATER TECHNOLOGIES INC delivered good returns on Tuesday. It grew by +0.63% to close at 70.55. On a day when the overall market breadth was 35%, it closed higher than 11% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.
WTS showed a strong down trend over the last 3 months. During this period WTS returned -11.65% and saw a maximum drawdown of -18.71%. There were 4 short signals during this period that returned a cumulative of +3.22% to investors.
During the last three months WTS was mostly loss making and delivered on average -0.19% per day. It's best return during this period (of +5.04%) was on Monday, 5 Nov, 2018. While it's worst loss in the same period (of -4.06%) was on Wednesday, 10 Oct, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 18 Sep, 2018. The bullish trend returned +2.68% to investors. This was followed by a bearish trend that started on 4 Oct, 2018 and ended on 12 Oct, 2018. This bearish trend lost -12.22% of investor capital.
On monthly basis, WTS delivered profits in more months over the last year, than losses. WTS delivered profits less regularly than SP500 index. WTS was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -13.87% compared to -7.28% returned by SP500 index in Oct 2018. WTS had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both WTS and SP500 index significantly outperform during months when quarterly/annual results are announced.
"Based on my own personal experience - both as an investor in recent years and an expert witness in years past - rarely do more than three or four variables really count. Everything else is noise.
WTS 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 WTS's volatility from 13 Sep, 2018 to 4 Dec, 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 WTS has significant positive skewness in it's return distribution. This indicates that investors can expect WTS to recover from drawdowns quickly. Which makes WTS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
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