11.68 -0.41 (-3.47%) Sell

Don't buy PTEN now, it is a really dangerous investment now

13 min read

PATTERSON UTI ENERGY INC has destroyed investor wealth on Tuesday. It fell by -3.47% to close at 11.68. On a day when the overall market breadth was 34%, it closed higher than 71% of the market. In comparison, the benchmark SP500 index closed today at +0.01%.

[Themes containing PTEN]

PTEN showed a strong bearish trend over the last 3 months. During this period PTEN fell by -34.71% and saw a maximum drawdown of -34.93%. There was a short signal during this period which returned +34.71%.


PTEN has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 5 Dec, 2016 to 18 Dec, 2018. One must note that PTEN is currently at it's worst performance to the SP500 index which makes it a bad investment candidate. Over the last 2 years 11 months and 14 days, PTEN underperformed the SP500 index on 49% days. Which indicates that on days PTEN underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

PTEN returned losses on 59% days in the last three months. During this time, it delivered on average -0.62% per day. It delivered it's best daily return of +9.68%, during this period, on Thursday, 25 Oct, 2018. The longest stort-term trend during this period was 6 losing days, which started on 17 Oct, 2018 and ended on 24 Oct, 2018. This bearish trend lost -19.11% of investor capital.

During the last year PTEN had 2 profitable months and 10 loss making months. PTEN returned profits in fewer months than SP500 index. PTEN significantly outperformed SP500 index in Apr 2018, when it returned +26.45% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. PTEN had a longer winning streak of losing months than SP500 index. It went down in 8 straight months (from May 2018 to Dec 2018) during which period it delivered -56.86%. It is interesting to note that both PTEN and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.

PTEN 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 PTEN's volatility from 21 Sep, 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 PTEN 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.

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

Based on your interest in PTEN you may find it interesting to know that PFE and MSFT are both large caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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