32.64 -1.05 (-3.2%) Sell

DRQ investors looking to exit as part of sectoral rotation

13 min read

DRIL-QUIP INC is a falling knife that can bleed you if you catch it today. It delivered -3.2% to close at 32.64. During the last week it delivered -4.48% and saw a maximum drawdown of -6.37% before bouncing back.

[Themes containing DRQ]

DRQ is currently in a bearish trend. The current bearish signal has generated a profit of +31.88% for investors in the last three months.


DRQ has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 29 Apr, 2016 to 13 Dec, 2018. One must note that DRQ is currently at it's worst performance to the SP500 index which makes it a bad investment candidate. Over the last 2 years 11 months and 9 days, DRQ underperformed the SP500 index on 51% days.

DRQ returned losses on 56% days in the last three months. During this time, it delivered on average -0.63% per day. It delivered it's worst daily return of -8.64%, during this period, on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 5 losing days, which started on 4 Dec, 2018 and ended on 11 Dec, 2018. This bearish trend lost -19.25% of investor capital.

The last 12 months saw DRQ's investors making profits in 5 months and incurring losses in 7 months. DRQ was less consistent in delivering monthly returs than SP500 index. DRQ was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -17.34% compared to -7.28% returned by SP500 index in Oct 2018. DRQ had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

You know you are on the road to success if you would do your job, and not be paid for it.
-- Oprah Winfrey

DRQ is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in DRQ's volatility from 18 Sep, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that DRQ has positive skewness in it's return distribution. This indicates that investors can expect DRQ to make attempts to recover from drawdowns quickly. Which makes DRQ a good candidate for momentum based trading on short-term bullish trends or counter-trends.

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

On a general note (since you are interested in DRQ), EHC is a small cap that deserves to be closely tracked for investment opportunities.

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