90.96 -1.48 (-1.62%) Sell

Waiting to invest in PFPT? Avoid at the moment as it is a falling knife that can bleed you if you catch it

13 min read

PFPT is a falling knife that can bleed you if you catch it today. On a longer term basis, investors in PROOFPOINT INC made -0.1% per day. Tuesday's performance of -1.62% was a underperformance compared to it's daily average.

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PFPT showed a strong bearish trend over the last 3 months. During this period PFPT delivered -20.42% and saw a maximum drawdown of -26.91%. There were 2 short signals during this period that returned a cumulative of +18.82% to investors.


PFPT has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 8 Feb, 2016 to 10 May, 2018. Over the last 2 years 11 months and 7 days, PFPT outperformed the SP500 index on 53% days.

During the last three months PFPT was mostly loss making and delivered on average -0.31% per day. It's best return during this period (of +7.46%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -15.59%) was on Friday, 26 Oct, 2018. The longest stort-term trend during this period was 5 losing days, which started on 13 Sep, 2018 and ended on 19 Sep, 2018. This bearish trend lost -9.6% of investor capital.

The last 12 months saw PFPT's investors making profits in 6 months and incurring losses in 6 months. PFPT was less consistent in delivering monthly returs than SP500 index. PFPT significantly outperformed SP500 index in Jan 2018, when it returned +10.73% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. PFPT had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

An investment in knowledge pays the best interest.
-- Benjamin Franklin

PFPT 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 PFPT's volatility from 13 Sep, 2018 to 26 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 PFPT has significant positive skewness in it's return distribution. This indicates that investors can expect PFPT to recover from drawdowns quickly. Which makes PFPT 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 PFPT. Therefore, SP500 must receive a lower allocation than PFPT in your portfolio. SP500 index usually has shorter drawdown period than PFPT.

On a general note (since you are interested in PFPT), three large cap instruments that deserve special mention are CSCO, MSFT and PFE. They have all outperformed the market and must be closely watched for investment opportunities.

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