79.61 -1.71 (-2.15%) Sell

GRUB investors hurt by serious losses

13 min read

GRUBHUB INC. is a falling knife that can bleed you if you catch it on Thursday. It fell by -2.15% to close at 79.61. It is currently trading -45% below it's 52 week high of 146.73.

[Themes containing GRUB]

Buy-and-Hold investors in GRUB experienced a maximum drawdown of -47.44% over the last three months. It fell by -45.51% during this strong bearish 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 +39.01%.


GRUB has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 29 Jan, 2016 to 11 Sep, 2018. Over the last 2 years 11 months and 9 days, GRUB outperformed the SP500 index on 53% days.

During the last three months GRUB was mostly loss making and delivered on average -0.89% per day. It's best return during this period (of +6.39%) was on Tuesday, 16 Oct, 2018. While it's worst loss in the same period (of -11.99%) was on Thursday, 25 Oct, 2018. The longest stort-term trend during this period was 7 losing days, which started on 28 Sep, 2018 and ended on 8 Oct, 2018. This bearish trend lost -9.72% of investor capital.

During the last year GRUB had 8 profitable months and 4 loss making months. Profitable number of months of GRUB and SP500 index were the same. GRUB significantly outperformed SP500 index in Feb 2018, when it returned +37.59% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. GRUB had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both GRUB and SP500 index significantly outperform during months when quarterly/annual results are announced.

"My father, being a Scotsman, taught me to look after finances. I'm shrewd. Some people may call me tight.

GRUB is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in GRUB's volatility from 3 Oct, 2018 to 25 Oct, 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 GRUB 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.

Investors trading in GRUB derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in GRUB), two small cap instruments that deserve special mention are ZBRA and HQY. They have significantly outperformed the overall market.

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