Lindsay’s Long‑Run Drawdowns: Why a Bull Market May Hide Fresh Headwinds

Persistent underperformance and high‑volatility signals raise caution for the next 12‑18 months

LNN Lindsay Corporation

In this report

01

Returns Overview

Period returns, alpha, cumulative performance, distributions

P. 2-3

→

02

Volatility Analysis

Annualized volatility, downside deviation, drawdowns

P. 4-5

→

03

Beta & Correlation

Trailing, upside, downside beta, systematic risk

P. 6-7

→

04

Risk-Adjusted Returns

Sharpe, Sortino, Calmar, Information, Treynor

P. 8-9

→

05

Market Regime Analysis

Bull/bear behavior, capture ratios

P. 10-11

→

06

Investment Highlights & Risk Summary

Executive summary, risk flags, rankings

P. 12-13

→

Returns Overview

Lindsay Corporation (LNN) — Return Performance

Lindsay Corporation (LNN) has underperformed its industrial sector benchmark (XLI) across all measured horizons, delivering negative total returns while generating positive absolute alpha in the short term. Over the past month the stock rose 3.09% versus a sector gain of 2.49%, producing an alpha of +5.68%; however, this modest outperformance quickly eroded, with three‑month and six‑month returns of -5.37% and -4.41% against sector declines of -13.07% and -16.70%, yielding alphas of -18.47% and -12.27% respectively. The long‑term picture is more stark: one‑year, three‑year and five‑year returns are down 21.69%, 3.19% and 28.81%, while the sector fell 40.65%, 71.77% and 111.31%, resulting in cumulative alphas of -40.68%, -69.10% and -100.62%. The pattern indicates brief short‑term relative strength but persistent lagging performance over medium to long horizons.

Period Returns vs S&P 500 & XLI

Monthly Returns Heatmap

LNN

The stock generated modest positive alpha in the most recent month (+5.68%) before turning negative for longer intervals, suggesting limited short‑term upside that did not translate into sustained outperformance. Over three‑year and five‑year periods, LNN’s returns lagged the sector by 69.10% and 100.62%, highlighting a pronounced long‑term divergence and indicating that investors have been unable to capture sector recovery through this stock.

Returns Overview

Lindsay Corporation (LNN) — Return Charts

Volatility Analysis

Lindsay Corporation (LNN) — Volatility Profile

Lindsay Corporation (LNN) exhibits markedly higher price variability than the broader market, with an annualized volatility of 33.0% compared to the S&P 500's 17.78%, indicating roughly 86% more dispersion in daily returns. The stock's downside risk profile is pronounced: a downside deviation of 23.73% signals that negative returns are substantially larger than the overall volatility, and a max drawdown of -41.51% from November 2022 to April 2026 demonstrates both depth and an extended recovery horizon with no full rebound to prior peaks. Recent short‑term volatility remains elevated; the 60‑day vol of 37.66% exceeds the long‑term 252‑day average of 28.43%, suggesting that market participants are currently pricing heightened uncertainty around the company.

Volatility Metrics

LNN

The company's volatility is nearly double the S&P 500 benchmark, reflecting a riskier price profile for investors. Downside deviation at 23.73% and an unresolved drawdown of over 40% illustrate significant tail‑risk exposure, while the prolonged duration (approximately 3½ years) underscores limited resilience in adverse market environments. The 60‑day volatility surpasses the 252‑day level by roughly 9.2 percentage points, confirming that recent price swings are above the historical norm and may persist if underlying operational or macro factors remain unsettled.

LNN's annualized volatility of 33.0% is about 86% higher than the S&P 500.
Downside deviation (23.73%) exceeds half of the total volatility, highlighting asymmetric risk.
The max drawdown of -41.51% spans over three years with no recovery to prior highs.
Current 60‑day volatility (37.66%) is above the long‑term 252‑day average (28.43%).
Elevated short‑term volatility suggests heightened market sensitivity to news or sector dynamics.

Positive Characteristics
The high volatility can provide opportunities for tactical traders seeking larger price moves.
When the company successfully resolves operational challenges, upside potential may be amplified due to the steep risk/reward asymmetry.

Volatility Analysis

Lindsay Corporation (LNN) — Volatility & Drawdown Charts

Beta & Correlation

Lindsay Corporation (LNN) — Beta Profile

Lindsay Corporation (LNN) exhibits a trailing beta of 0.893 versus the S&P 500, placing it squarely in the market‑like range (0.8‑1.2). This indicates that the stock’s price movements have historically tracked broader market swings with slightly less sensitivity, offering modest defensive characteristics without being overly inertial. The sector beta of 0.915 against the Industrials index (XLI) is marginally higher, suggesting that a larger portion of LNN’s risk originates from industry dynamics rather than pure market exposure.

Beta & Correlation Metrics

LNN

The upside beta of 0.906 versus the downside beta of 0.839 reveals a subtle asymmetry: LNN tends to rise slightly more in bullish market environments than it falls during downturns, which can be attractive for risk‑averse investors seeking limited downside volatility. However, the R-squared of 23.1% signals that only about one‑quarter of the stock’s returns are explained by movements in the S&P 500, leaving a substantial 76.9% as idiosyncratic variance—meaning diversification benefits remain strong. When benchmarked against its sector, the sector beta (0.915) and sector correlation (0.542) show that industry factors account for roughly 29.4% of return variation, reinforcing that company‑specific drivers dominate the risk profile.

Trailing market beta of 0.893 places LNN in a market‑like risk band with slightly lower sensitivity than the S&P 500.
Upside beta (0.906) exceeds downside beta (0.839), indicating modestly stronger participation in rally scenarios versus declines.
R-squared of 23.1% implies that 76.9% of return variance is idiosyncratic, offering meaningful diversification potential.
Sector beta (0.915) is close to the market beta, but sector R² (29.4%) shows industry factors explain less than a third of performance.
Systematic risk accounts for only 23.1% of total variance, highlighting that most price movement stems from company‑specific events.

Positive Characteristics
The upside‑downside beta asymmetry provides a slight cushion during market corrections.
Low overall R-squared enhances the stock’s utility in diversified portfolios by contributing non‑correlated returns.

Beta & Correlation

Lindsay Corporation (LNN) — Rolling Beta

Positive Notes

The upside‑downside beta asymmetry provides a slight cushion during market corrections.

Low overall R-squared enhances the stock’s utility in diversified portfolios by contributing non‑correlated returns.

Risk-Adjusted Returns

Lindsay Corporation (LNN) — Risk-Adjusted Performance

Lindsay Corporation (LNN) delivers modest risk‑adjusted returns in the current market environment. A Sharpe ratio of 0.164 indicates that total return barely exceeds the risk‑free rate after accounting for overall volatility, falling well short of the >1.0 threshold typically viewed as satisfactory. However, the Sortino ratio of 0.228 is higher than the Sharpe, suggesting that downside volatility is lower than total volatility and that the stock’s performance suffers less from negative swings relative to its upside potential.

Risk-free rate: 3.63% (Fed Funds Rate)

Risk-Adjusted Metrics

LNN

The Calmar ratio of 0.218 reflects a modest return relative to the worst historical drawdown, implying that periods of decline have eroded a sizable share of gains and that investors may experience noticeable downside in adverse market regimes. An Information Ratio of -0.13 signals negative alpha generation versus its benchmark, indicating that active management has not added value on a risk‑adjusted basis. The Treynor ratio of 6.05, while numerically high, must be interpreted against the stock’s beta; without the beta figure it is difficult to gauge whether systematic risk is being efficiently compensated.

Sharpe ratio well below 1.0 shows limited excess return per unit of total risk.
Sortino exceeding Sharpe points to a comparatively gentler downside volatility profile.
Calmar ratio under 0.5 suggests that worst drawdowns have significantly offset cumulative returns.
Negative Information Ratio indicates underperformance relative to the benchmark after adjusting for risk.
Treynor ratio appears strong but lacks context without beta, limiting its interpretive value.

Positive Characteristics
The higher Sortino ratio highlights a favorable downside risk characteristic compared with overall volatility.
A Treynor ratio of 6.05 suggests that the stock may be delivering return per unit of systematic risk, pending confirmation of beta levels.

Risk-Adjusted Returns

Lindsay Corporation (LNN) — Rolling Sharpe & Sortino

Positive Notes

The higher Sortino ratio highlights a favorable downside risk characteristic compared with overall volatility.

A Treynor ratio of 6.05 suggests that the stock may be delivering return per unit of systematic risk, pending confirmation of beta levels.

Market Regime Analysis

Lindsay Corporation (LNN) — Regime Behavior

Lindsay Corporation exhibits markedly different return characteristics across market regimes, reflecting its sensitivity to broader equity dynamics and volatility conditions. In bull markets with low volatility the stock delivers a robust average monthly gain of 1.25%, but this advantage erodes sharply when volatility spikes, falling to just 0.52% in a Bull‑HighVol environment. Conversely, during bear phases the company’s performance remains modestly positive in calm declines (0.25% per month) yet turns negative under volatile downtrends, posting an average loss of -0.81%. The firm’s upside capture of 47.2% and downside capture of 43.3% generate a capture ratio of 1.09, indicating it modestly outperforms on the upside relative to its downside exposure.

Current Market Regime: Bull-HighVol

Bull-LowVol = calm uptrend • Bull-HighVol = volatile uptrend • Bear-LowVol = orderly decline • Bear-HighVol = crisis

Regime Returns & Capture Ratios

LNN

In Bull‑LowVol periods Lindsay captures nearly half of market gains (47.2% upside capture) while limiting losses to 43.3% of market declines, resulting in a favorable capture ratio above 1.0. However, the transition to Bull‑HighVol conditions sees its monthly return drop by more than half, suggesting heightened sensitivity to volatility that dampens participation in strong uptrends. During Bear‑LowVol regimes the stock’s modest positive return (0.25% avg) and low downside capture indicate defensive qualities, but the sharp negative performance (-0.81% avg) in Bear‑HighVol markets reveals vulnerability when both price pressure and volatility intensify.

Market Regime Analysis

Lindsay Corporation (LNN) — Regime & Capture Charts

Regime Timeline

Lindsay’s strongest returns occur in Bull‑LowVol regimes, delivering over five times the return seen in volatile bull markets.
The capture ratio of 1.09 reflects a modest upside bias but is limited by relatively low absolute upside capture (47.2%).
Defensive characteristics are evident in Bear‑LowVol periods where downside capture remains below market losses, yet the stock struggles in Bear‑HighVol environments.

Positive Characteristics
Positive average return of 0.25% per month in calm bear markets suggests some defensive resilience.
Capture ratio above 1.0 indicates the stock can modestly outpace market gains relative to its losses when volatility is low.

Investment Highlights & Risk Summary

Lindsay Corporation (LNN) — Summary & Implications

Lindsay Corporation (LNN) has delivered a 1‑year total return of -21.69%, lagging both the S&P 500 and its industrials peer group by more than 40 basis points of alpha. The stock’s risk profile is marked by an annualized volatility of 33.0% and a maximum drawdown of -41.5%, indicating substantial capital‑loss potential in adverse market regimes. On the positive side, LNN exhibits a modestly defensive beta of 0.893 and a downside capture ratio of 43.3% versus an upside capture of 47.2%, suggesting that losses have historically been slightly smaller than gains when the broader market moves. However, risk‑adjusted performance remains weak, with a Sharpe ratio of 0.164 and a Sortino ratio of 0.228, well below the typical benchmark of 1.0 for attractive risk‑adjusted returns. Investors should weigh the defensive beta and capture profile against the deep drawdown history and persistent underperformance relative to both the S&P 500 and the industrials sector.

Summary Dashboard

Investment Highlights

Beta of 0.893 indicates lower sensitivity to market swings than the overall index, providing a modest defensive tilt.
Upside capture of 47.2% versus downside capture of 43.3% yields a capture ratio above 1.0, reflecting slightly better participation in market rallies than declines.
Downside capture below 50% suggests that during market downturns the stock has historically lost less than half of the market’s decline.

Risk-Return Rankings

LNN HIGH

High volatility and deep drawdown dominate a modestly defensive beta, resulting in an overall high risk profile.

Strength: Defensive beta (0.893) reduces market‑wide exposure.

Concern: Maximum drawdown of -41.5% signals significant capital loss risk.

Key Takeaways

LNN underperformed its sector by 40.6% over the past year, reflecting weak relative momentum.
Risk‑adjusted metrics (Sharpe 0.164, Sortino 0.228) are far below attractive thresholds, indicating poor compensation for risk taken.
The stock’s volatility of 33.0% exceeds the S&P 500’s typical 17–18%, amplifying both upside and downside swings.
Despite a defensive beta, the deep historical drawdown suggests limited upside potential without a clear catalyst.

PORTFOLIO IMPLICATIONS

Given its high volatility and pronounced drawdown history, LNN is best suited for portfolios that can tolerate elevated risk and seek modest defensive exposure within the industrials sector. The low beta may complement higher‑beta holdings by dampening overall portfolio sensitivity to market moves, but investors should allocate only a small portion of capital to LNN until clearer earnings or operational catalysts emerge to improve its risk‑adjusted return profile.

LNN

Related Reports

Visit finexus.net/reports for more reports

Report written 2026-06-07 • Finexus

Disclaimer

This report is generated by Finexus and is provided for informational purposes only. It does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any security.

The analysis is based on publicly available data from sources believed to be reliable, but Finexus does not guarantee its accuracy, completeness, or timeliness. Valuation estimates, projections, and any forward-looking statements are model outputs based on historical data and assumptions that may not hold in the future.

Past performance is not indicative of future results. Readers should conduct their own independent research and consult a qualified financial advisor before making any investment decision. Finexus and its contributors disclaim any liability for losses arising from the use of this report.