QEP is a falling knife, continues to bleed every investor trying to catch it
13 Dec, 201813 min read
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QEP RESOURCES, INC. was among the worst performers on Thursday. It returned -0.41% to close at 7.32. It is currently trading -46% below it's 52 week high of 13.56.
Buy-and-Hold investors in QEP experienced a maximum drawdown of -39.51% over the last three months. It returned -29.89% during this strong down 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 +32.47%.
QEP has been underperforming the SP500 index in recent time, after having outperformed till 7 Jun, 2016. Over the last 2 years 11 months and 9 days, QEP underperformed the SP500 index on 50% days. Which indicates that on days QEP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
QEP returned losses on 54% days in the last three months. During this time, it delivered on average -0.52% per day. It delivered it's best daily return of +8.83%, during this period, on Monday, 19 Nov, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 25 Sep, 2018. The bullish trend returned +8.62% to investors. This was followed by a bearish trend that started on 8 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -18.97% of investor capital.
On monthly basis, QEP delivered losses in more months over the last year, than profits. QEP delivered profits less regularly than SP500 index. QEP significantly outperformed SP500 index in Apr 2018, when it returned +26.61% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. QEP had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered -40.97%.
We make a living by what we get, but we make a life by what we give.
-- Winston Churchill
QEP 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 QEP's volatility from 18 Sep, 2018 to 8 Nov, 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 QEP has significant positive skewness in it's return distribution. This indicates that investors can expect QEP to recover from drawdowns quickly. Which makes QEP 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 QEP. Therefore, SP500 must receive a lower allocation than QEP in your portfolio. SP500 index usually has shorter drawdown period than QEP.
Based on your interest in QEP you may find it interesting to know that ~SMALLCAP and NSPR have both shown remarkable performance and deserve to be on every investors' watchlist.
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