27.03 -0.64 (-2.38%) Sell

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

13 min read

ENVIVA PARTNERS, LP is a falling knife that can bleed you if you catch it on Monday. It returned -2.38% to close at 27.03. It is currently trading -18% below it's 52 week high of 33.0.

[Themes containing EVA]

Buy-and-Hold investors in EVA experienced a maximum drawdown of -16.45% over the last three months. It returned -13.09% 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 +3.36%.


EVA has been underperforming the SP500 index in recent time, after having outperformed till 8 Nov, 2016. Over the last 2 years 11 months and 10 days, EVA outperformed the SP500 index on 49% days. Which indicates that on days EVA outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months EVA was mostly loss making and delivered on average -0.22% per day. It's best return during this period (of +2.66%) was on Monday, 10 Dec, 2018. While it's worst loss in the same period (of -3.61%) was on Wednesday, 24 Oct, 2018. There was initially a bullish trend during this period which started on 18 Oct, 2018 and went on till 23 Oct, 2018. The bullish trend returned +2.94% to investors. This was followed by a bearish trend that started on 11 Dec, 2018 and ended on 17 Dec, 2018. This bearish trend lost -6.93% of investor capital.

On monthly basis, EVA delivered profits and losses in equal number of months. EVA delivered profits less regularly than SP500 index. EVA significantly outperformed SP500 index in May 2018, when it returned +9.98% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. EVA had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -15.22%. It is interesting to note that both EVA and SP500 index significantly outperform during months when quarterly/annual results are announced.

I understand that finance can be very complex.
-- Kevin Harrington

EVA 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 EVA's volatility from 4 Oct, 2018 to 26 Oct, 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 EVA has significant negative skewness in it's return distribution. This indicates that EVA is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in EVA you may find it interesting to know that OPNT, VIPS and ICPT are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.

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