XPO LOGISTICS, INC.

66.46 -4.44 (-6.68%) Sell

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

13 min read

XPO LOGISTICS, INC. significantly underperformed on Friday. It returned -6.68% to close at 66.46. On a day when the overall market breadth was 35%, it closed higher than 4% of the market. In comparison, the benchmark SP500 index closed today at -0.0233%.

[Themes containing XPO]

Buy-and-Hold investors in XPO experienced a maximum drawdown of -41.98% over the last three months. It returned -40.66% 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 +39.58%.

Trend

XPO has been underperforming the SP500 index in recent time, after having outperformed till 18 Jun, 2018. Over the last 2 years 11 months and 3 days, XPO outperformed the SP500 index on 53% days.

During the last three months XPO was mostly loss making and delivered on average -0.79% per day. It's best return during this period (of +4.89%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -6.83%) was on Tuesday, 4 Dec, 2018. There was initially a bullish trend during this period which started on 25 Sep, 2018 and went on till 27 Sep, 2018. The bullish trend returned +1.91% to investors. This was followed by a bearish trend that started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -12.85% of investor capital.

On monthly basis, XPO delivered profits in more months over the last year, than losses. XPO delivered profits less regularly than SP500 index. XPO was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -21.09% compared to -7.28% returned by SP500 index in Oct 2018. XPO had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

"Our incomes are like our shoes; if too small, they gall and pinch us; but if too large, they cause us to stumble and to trip.

XPO 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 fall in XPO's volatility from 10 Sep, 2018 to 28 Sep, 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 XPO 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 XPO. Therefore, SP500 must receive a lower allocation than XPO in your portfolio. SP500 index usually has shorter drawdown period than XPO.

On a general note (since you are interested in XPO), AMRH has performed really well and deserves to be closely tracked for investment opportunities.

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