TPH does a dead cat bounce, it's still too early to buy into it
17 Dec, 201813 min read
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TRI POINTE GROUP, INC. delivered good returns today. It grew by +1.96% to close at 11.44. It's recent 5 day performance has been -1.41%, -2.82%, +2.72%, -0.87% and -5.43%.
TPH showed a strong down trend over the last 3 months. During this period TPH lost -17.34% and saw a maximum drawdown of -23.04%. There was a short signal during this period which returned +17.34%.
TPH has been underperforming the SP500 index in recent time, after having outperformed till 5 Jan, 2018. Over the last 2 years 11 months and 10 days, TPH underperformed the SP500 index on 47% days. Which indicates that on days TPH underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.
During the last three months TPH was mostly loss making and delivered on average -0.27% per day. It's best return during this period (of +7.82%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -5.56%) was on Monday, 29 Oct, 2018. There was initially a bearish trend during this period which started on 26 Sep, 2018 and went on till 1 Oct, 2018. The trend delivered -8.44% losses to investors. This was followed by a bullish trend that started on 16 Nov, 2018 and ended on 28 Nov, 2018. This bullish trend delivered +9.49% to investors.
TPH had 5 profitable and 7 loss making months over the last year. During the last year, TPH underperformed SP500 index on monthly return basis. TPH was also a more risky investment than SP500 index as it's worst month in the last year, Sep 2018, returned -14.42% compared to -7.28% returned by SP500 index in Oct 2018. TPH had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.
One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.
-- William A. Feather
TPH 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 TPH's volatility from 19 Sep, 2018 to 30 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 TPH has significant positive skewness in it's return distribution. This indicates that investors can expect TPH to recover from drawdowns quickly. Which makes TPH a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
TPH has more chance of extreme outcomes than the SP500 index. Therefore, TPH must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than TPH.
Based on your interest in TPH you may find it interesting to know that AMRH has shown remarkable performance and deserves to be on every investors' watchlist.
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