12.67 -0.13 (-1.02%) Buy

SPPI investors herd to book profits while the going is good

13 min read

SPECTRUM PHARMACEUTICALS INC delivered massive losses today. It returned -1.02% to close at 12.67. It's recent 5 day performance has been +0.63%, +2.91%, -3.29%, -2.22% and -9.17%.

[Themes containing SPPI]

SPPI showed a strong down trend over the last 3 months. During this period SPPI returned -35.09% and saw a maximum drawdown of -46.0%. There was a short signal during this period which returned +25.92%.


SPPI has been underperforming the SP500 index in recent time, after having outperformed till 27 Aug, 2018. Over the last 2 years 11 months and 8 days, SPPI outperformed the SP500 index on 48% days. Which indicates that on days SPPI outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

SPPI returned losses on 56% days in the last three months. During this time, it delivered on average -0.57% per day. It delivered it's worst daily return of -22.66%, during this period, on Monday, 24 Sep, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +9.9% to investors. This was followed by a bearish trend that started on 8 Oct, 2018 and ended on 15 Oct, 2018. This bearish trend lost -13.38% of investor capital.

On monthly basis, SPPI delivered profits in more months over the last year, than losses. SPPI delivered profits less regularly than SP500 index. SPPI was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -29.67% compared to -7.28% returned by SP500 index in Oct 2018. SPPI 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 SPPI and SP500 index significantly outperform during months when quarterly/annual results are announced.

Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it .
-- Peter Lynch

SPPI 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 SPPI's volatility from 14 Sep, 2018 to 24 Sep, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that SPPI 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.

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

On a general note (since you are interested in SPPI), three instruments that deserve special mention are APRN, NSPR and AYTU. They have all outperformed the market and must be closely watched for investment opportunities.

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