60.8 -1.12 (-1.84%) Sell

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

13 min read

HELMERICH & PAYNE, INC. is a falling knife that can bleed you if you catch it on Thursday. It fell by -1.84% to close at 60.8. It is currently trading -18% below it's 52 week high of 74.33.

[Themes containing HP]

Buy-and-Hold investors in HP experienced a maximum drawdown of -20.24% over the last three months. It fell by -6.91% during this 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 +1.49%.


HP has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 12 Dec, 2016 to 31 Aug, 2017. Over the last 2 years 11 months and 9 days, HP underperformed the SP500 index on 49% days. Which indicates that on days HP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

HP returned losses on 53% days in the last three months. During this time, it delivered on average -0.09% per day. It delivered it's worst daily return of -5.55%, during this period, on Tuesday, 20 Nov, 2018. The longest stort-term trend during this period was 8 losing days, which started on 15 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -13.71% of investor capital.

During the last year HP had 6 profitable months and 6 loss making months. HP returned profits in fewer months than SP500 index. HP was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -11.12% compared to -7.28% returned by SP500 index in Oct 2018. HP had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -10.68%. It is interesting to note that both HP and SP500 index significantly outperform during months when quarterly/annual results are announced.

Wealth is not his that has it, but his that enjoys it.
-- Benjamin Franklin

HP 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 HP's volatility from 21 Sep, 2018 to 20 Nov, 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 HP 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.

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

On a general note (since you are interested in HP), three instruments that deserve special mention are ~SMALLCAP, APRN and AYTU. They have all outperformed the market and must be closely watched for investment opportunities.

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