40.85 -1.32 (-3.22%) Sell

Stop-loss on the minds of TRGP investors as it significantly underperforms

13 min read

TARGA RESOURCES CORP. significantly underperformed today. It lost -3.22% to close at 40.85. During the last week it lost -4.13% and saw a maximum drawdown of -7.64% before bouncing back.

[Themes containing TRGP]

Buy-and-Hold investors in TRGP experienced a maximum drawdown of -30.18% over the last three months. It lost -26.86% 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 +20.68%.


TRGP has been underperforming the SP500 index in recent time, after having outperformed till 6 Feb, 2017. Over the last 2 years 11 months and 10 days, TRGP outperformed the SP500 index on 53% days.

During the last three months TRGP was mostly loss making and delivered on average -0.47% per day. It's best return during this period (of +4.46%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -5.08%) was on Tuesday, 20 Nov, 2018. There was initially a bullish trend during this period which started on 21 Sep, 2018 and went on till 25 Sep, 2018. The bullish trend returned +1.55% 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 -12.47% of investor capital.

TRGP had 6 profitable and 6 loss making months over the last year. During the last year, TRGP underperformed SP500 index on monthly return basis. TRGP was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -13.62% compared to -7.28% returned by SP500 index in Oct 2018. TRGP and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both TRGP and SP500 index significantly outperform during months when quarterly/annual results are announced.

The hardest thing to understand in the world is the income tax.
-- Albert Einstein

TRGP 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 TRGP's volatility from 19 Sep, 2018 to 14 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 TRGP has significant positive skewness in it's return distribution. This indicates that investors can expect TRGP to recover from drawdowns quickly. Which makes TRGP 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 TRGP. Therefore, SP500 must receive a lower allocation than TRGP in your portfolio. SP500 index usually has shorter drawdown period than TRGP.

Based on your interest in TRGP you may find it interesting to know that PTC, KEYS and ZBRA are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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