16.03 -0.11 (-0.68%) Sell

The party never started for ZTO investors as it destroyed investor wealth

13 min read

ZTO EXPRESS (CAYMAN) INC. (Foreign) is a falling knife that can bleed you if you catch it on Tuesday. It returned -0.68% to close at 16.03. It is currently trading -28% below it's 52 week high of 22.43.

[Themes containing ZTO]

ZTO is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +3.39% for investors.


ZTO has been outperforming the SP500 index in recent time. Over the last 2 years and 2 months, ZTO underperformed the SP500 index on 47% days. Which indicates that on days ZTO underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

ZTO returned losses on 58% days in the last three months. During this time, it delivered on average -0.16% per day. It delivered it's worst daily return of -5.56%, during this period, on Monday, 24 Sep, 2018. There was initially a bearish trend during this period which started on 27 Sep, 2018 and went on till 10 Oct, 2018. The trend delivered -13.36% losses to investors. This was followed by a bullish trend that started on 21 Nov, 2018 and ended on 28 Nov, 2018. This bullish trend delivered +6.15% to investors.

On monthly basis, ZTO delivered losses in more months over the last year, than profits. ZTO delivered profits less regularly than SP500 index. ZTO significantly outperformed SP500 index in May 2018, when it returned +24.79% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ZTO had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Jun 2018 to Oct 2018) during which period it delivered -24.61%. It is interesting to note that both ZTO and SP500 index significantly outperform during months when quarterly/annual results are announced.

If you took our top fifteen decisions out, we'd have a pretty average record. It wasn't hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounced on them with vigor.
-- Charlie Munger

ZTO 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 ZTO's volatility from 3 Oct, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ZTO has significant positive skewness in it's return distribution. This indicates that investors can expect ZTO to recover from drawdowns quickly. Which makes ZTO a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

On a general note (since you are interested in ZTO), two instruments that have delivered similar performance as ZTO are STKL and NVGS. They are suitable as good alternative investment candidates that can diversify your portfolio.

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