27.65 -0.97 (-3.52%) Sell

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

13 min read

TURNING POINT BRANDS, INC. ranked among the worst performers on Monday. It lost -3.52% to close at 27.65. On a day when the overall market breadth was 34%, it closed higher than 2% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing TPB]

TPB is currently in a down trend. Over the last three months 2 bearish signals have generated a profit of +25.8% for investors.


TPB has been underperforming the SP500 index in recent time, after having outperformed till 8 Oct, 2018. Over the last 2 years 7 months and 3 days, TPB outperformed the SP500 index on 50% days. Which indicates that on days TPB outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

TPB returned losses on 64% days in the last three months. During this time, it delivered on average -0.58% per day. It delivered it's best daily return of +12.05%, during this period, on Monday, 8 Oct, 2018. There was initially a bullish trend during this period which started on 18 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +3.08% to investors. This was followed by a bearish trend that started on 16 Nov, 2018 and ended on 29 Nov, 2018. This bearish trend lost -16.48% of investor capital.

TPB had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of TPB and SP500 index were the same. TPB significantly outperformed SP500 index in May 2018, when it returned +27.62% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. TPB had a longer winning streak of profitable months than SP500 index. It went up in 7 straight months (from Apr 2018 to Oct 2018) during which period it delivered +84.14%. It is interesting to note that both TPB and SP500 index significantly outperform during months when quarterly/annual results are announced.

I owe my success to having listened respectfully to the very best advice, and then going away and doing the exact opposite.
-- G. K. Chesterton

TPB 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 TPB's volatility from 3 Oct, 2018 to 9 Oct, 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 TPB 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 TPB. Therefore, SP500 must receive a lower allocation than TPB in your portfolio. SP500 index usually has shorter drawdown period than TPB.

Based on your interest in TPB you may find it interesting to know that RHT is a mid cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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