PUMP investors elated by performance
11 Dec, 201813 min read
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PROPETRO HOLDING CORP. outperformed the broader market on Tuesday. It increased by +2.17% to close at 15.05. On a day when the overall market breadth was 35%, it closed higher than 7% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.
Buy-and-Hold investors in PUMP experienced a maximum drawdown of -25.7% over the last three months. It delivered -7.78% 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.
PUMP has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 30 Aug, 2017 to 23 Jan, 2018. Over the last 1 year and 9 months, PUMP underperformed the SP500 index on 49% days. Which indicates that on days PUMP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months PUMP was mostly loss making and delivered on average -0.08% per day. It's best return during this period (of +8.23%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -7.91%) was on Tuesday, 4 Dec, 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 -20.04% of investor capital.
The last 12 months saw PUMP's investors making profits in 4 months and incurring losses in 8 months. PUMP was less consistent in delivering monthly returs than SP500 index. PUMP significantly outperformed SP500 index in Apr 2018, when it returned +16.41% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. PUMP had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -23.17%. It is interesting to note that both PUMP and SP500 index significantly outperform during months when quarterly/annual results are announced.
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PUMP 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 PUMP's volatility from 19 Sep, 2018 to 13 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 PUMP has positive skewness in it's return distribution. This indicates that investors can expect PUMP to make attempts to recover from drawdowns quickly. Which makes PUMP a good candidate for momentum based trading on short-term bullish trends or counter-trends.
PUMP has more chance of extreme outcomes than the SP500 index. Therefore, PUMP must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than PUMP.
On a general note (since you are interested in PUMP), MSFT is a large cap that deserves to be closely tracked for investment opportunities.
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