6.19 -0.18 (-2.98%) Sell

The party never started for PETX investors as it destroyed investor wealth

13 min read

ARATANA THERAPEUTICS, INC. was among the worst performers on Thursday. It returned -2.98% to close at 6.19. It is currently trading +66% above it's 52 week low of 3.72 and is down only -11% from it's 52 week high.

[Themes containing PETX]

Buy-and-Hold investors in PETX experienced a maximum drawdown of -13.3% over the last three months. It gained +15.92% during this strong up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +9.42%.


PETX has been underperforming the SP500 index in recent time, after having outperformed till 3 Oct, 2016. Over the last 2 years 11 months and 9 days, PETX underperformed the SP500 index on 49% days. Which indicates that on days PETX underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

PETX was profitable on 50% days in the last three months. During this time, it delivered on average +0.28% per day. It delivered it's best daily return of +13.06%, during this period, on Monday, 22 Oct, 2018. There was initially a bearish trend during this period which started on 8 Oct, 2018 and went on till 12 Oct, 2018. The trend delivered -8.76% losses to investors. This was followed by a bullish trend that started on 1 Nov, 2018 and ended on 7 Nov, 2018. This bullish trend delivered +16.38% to investors.

On monthly basis, PETX delivered profits in more months over the last year, than losses. PETX delivered profits less regularly than SP500 index. PETX was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -19.65% compared to -7.28% returned by SP500 index in Oct 2018. PETX 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 PETX and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money is not the only answer, but it makes a difference.
-- Barack Obama

PETX is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in PETX's volatility from 17 Sep, 2018 to 22 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that PETX has significant positive skewness in it's return distribution. This indicates that investors can expect PETX to recover from drawdowns quickly. Which makes PETX a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in PETX you may find it interesting to know that HQY is a small cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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