24.19 -1.44 (-5.95%) Sell

Doubt in the minds of TRUP investors as it delivered massive losses

13 min read

TRUPANION, INC. has destroyed investor wealth today. It fell by -5.95% to close at 24.19. During the last week it fell by -8.06% and saw a maximum drawdown of -9.6% before bouncing back.

[Themes containing TRUP]

Buy-and-Hold investors in TRUP experienced a maximum drawdown of -35.36% over the last three months. It fell by -28.77% during this strong bearish 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 +11.87%.


TRUP has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 25 Jan, 2016 to 19 Jul, 2018. Over the last 2 years 11 months and 10 days, TRUP outperformed the SP500 index on 50% days. Which indicates that on days TRUP outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

TRUP was profitable on 52% days in the last three months. During this time, it delivered on average -0.45% per day. It delivered it's worst daily return of -10.14%, during this period, on Wednesday, 26 Sep, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 15 Nov, 2018 and went on till 26 Nov, 2018. This bullish trend returned +13.12% to investors.

During the last year TRUP had 6 profitable months and 6 loss making months. TRUP returned profits in fewer months than SP500 index. TRUP was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -21.7% compared to -7.28% returned by SP500 index in Oct 2018. TRUP had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both TRUP 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

TRUP is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in TRUP's volatility from 19 Sep, 2018 to 26 Sep, 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 TRUP 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 TRUP. Therefore, SP500 must receive a lower allocation than TRUP in your portfolio. SP500 index usually has shorter drawdown period than TRUP.

Based on your interest in TRUP you may find it interesting to know that TPNL, DFBG and NFEC have all shown remarkable performance this year and deserve to be on every investor's watchlist.

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