21.7 -0.4 (-1.85%) Sell

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

13 min read

TRN was among the worst performers today. On a longer term basis, investors in TRINITY INDUSTRIES INC made -0.02% per day. Thursday's performance of -1.85% was a significant underperformance compared to it's daily average.

[Themes containing TRN]

TRN showed a strong down trend over the last 3 months. During this period TRN returned -40.12% and saw a maximum drawdown of -46.47%. There was a short signal during this period which returned +35.3%.


TRN has been underperforming the SP500 index in recent time, after having outperformed till 28 Dec, 2017. Over the last 2 years 11 months and 9 days, TRN underperformed the SP500 index on 50% days. Which indicates that on days TRN underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

TRN returned losses on 59% days in the last three months. During this time, it delivered on average -0.75% per day. It delivered it's worst daily return of -20.42%, during this period, on Thursday, 1 Nov, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +2.54% to investors. This was followed by a bearish trend that started on 24 Sep, 2018 and ended on 28 Sep, 2018. This bearish trend lost -1.42% of investor capital.

On monthly basis, TRN delivered losses in more months over the last year, than profits. TRN delivered profits less regularly than SP500 index. TRN was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -22.4% compared to -7.28% returned by SP500 index in Oct 2018. TRN had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -14.0%.

Some of the people in finance touch enormous parts of the economy.
-- Stephen A. Schwarzman

TRN 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 TRN's volatility from 2 Oct, 2018 to 1 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 TRN has significant positive skewness in it's return distribution. This indicates that investors can expect TRN to recover from drawdowns quickly. Which makes TRN a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in TRN derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

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

Based on your interest in TRN you may find it interesting to know that PRQR has shown remarkable performance this year and deserves to be on every investors' watchlist.

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