16.8 -0.26 (-1.52%) Sell

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

13 min read

USAP significantly underperformed today. On a longer term basis, investors in UNIVERSAL STAINLESS & ALLOY PRODUCTS INC made +0.08% per day. Thursday's performance of -1.52% was a significant underperformance compared to it's daily average.

[Themes containing USAP]

USAP showed a strong down trend over the last 3 months. During this period USAP lost -38.89% and saw a maximum drawdown of -40.04%. There was a short signal during this period which returned +38.89%.


USAP has been underperforming the SP500 index in recent time, after having outperformed till 10 Apr, 2018. Over the last 2 years 11 months and 9 days, USAP outperformed the SP500 index on 47% days. Which indicates that on days USAP outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months USAP was mostly loss making and delivered on average -0.76% per day. It's best return during this period (of +4.94%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -8.26%) was on Wednesday, 24 Oct, 2018. There was initially a bearish trend during this period which started on 17 Oct, 2018 and went on till 24 Oct, 2018. The trend delivered -20.17% losses to investors. This was followed by a bullish trend that started on 30 Oct, 2018 and ended on 7 Nov, 2018. This bullish trend delivered +19.11% to investors.

USAP had 5 profitable and 7 loss making months over the last year. During the last year, USAP underperformed SP500 index on monthly return basis. USAP significantly outperformed SP500 index in Jul 2018, when it returned +26.04% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. USAP had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Sep 2018 to Dec 2018) during which period it delivered -52.42%. It is interesting to note that both USAP and SP500 index significantly outperform during months when quarterly/annual results are announced.

"The way to become rich is to put all your eggs in one basket and then watch that basket.

USAP 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 USAP's volatility from 20 Sep, 2018 to 24 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 USAP has significant negative skewness in it's return distribution. This indicates that USAP is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in USAP you may find it interesting to know that NVCN, GNK and ICPT are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.

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