79.62 -5.28 (-6.64%) Sell

SPSC is a falling knife, continues to bleed every investor trying to catch it

13 min read

SPS COMMERCE INC was among the worst performers today. It lost -6.64% to close at 79.62. During the last week it lost -5.56% and saw a maximum drawdown of -9.17% before bouncing back.

[Themes containing SPSC]

SPSC is currently in a down trend. The current bearish signal has generated a profit of +14.71% for investors in the last three months.


SPSC has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, SPSC underperformed the SP500 index on 47% days. Which indicates that on days SPSC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months SPSC was mostly loss making and delivered on average -0.26% per day. It's best return during this period (of +12.6%) was on Friday, 26 Oct, 2018. While it's worst loss in the same period (of -6.64%) was on Monday, 17 Dec, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 11 Oct, 2018. The trend delivered -14.04% losses to investors. This was followed by a bullish trend that started on 25 Oct, 2018 and ended on 29 Oct, 2018. This bullish trend delivered +16.71% to investors.

SPSC had 9 profitable and 3 loss making months over the last year. SPSC was profitable in more months than SP500 index. SPSC significantly outperformed SP500 index in Aug 2018, when it returned +14.55% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SPSC 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 SPSC and SP500 index significantly outperform during months when quarterly/annual results are announced.

Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.
-- Ayn Rand

SPSC is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in SPSC's volatility from 24 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 SPSC has significant positive skewness in it's return distribution. This indicates that investors can expect SPSC to recover from drawdowns quickly. Which makes SPSC 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 SPSC. Therefore, SP500 must receive a lower allocation than SPSC in your portfolio. SP500 index usually has shorter drawdown period than SPSC.

Based on your interest in SPSC you may find it interesting to know that PFE, V and MSFT are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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