ADFFOODS investors herd to book profits while the going is good
18 Jan, 201913 min read
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ADF FOODS LIMITED significantly underperformed on Friday. It returned -2.36% to close at 265.35. On a day when the overall market breadth was 71%, it closed higher than 87% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
ADFFOODS is currently in a up trend. The current bullish signal has generated a profit of +4.74% for ADFFOODS's investors in the last three months.
ADFFOODS has been underperforming the NIFTY-50 index in recent time, after having outperformed till 29 Nov, 2017. Over the last 3 years and 1 month, ADFFOODS outperformed the NIFTY-50 index on 46% days. Which indicates that on days ADFFOODS outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.
ADFFOODS returned losses on 54% days in the last three months. During this time, it delivered on average +0.48% per day. It delivered it's best daily return of +19.99%, during this period, on Monday, 5 Nov, 2018. There was initially a bullish trend during this period which started on 22 Nov, 2018 and went on till 30 Nov, 2018. The bullish trend returned +12.87% to investors. This was followed by a bearish trend that started on 19 Dec, 2018 and ended on 26 Dec, 2018. This bearish trend lost -8.59% of investor capital.
On monthly basis, ADFFOODS delivered profits and losses in equal number of months. ADFFOODS delivered profits in more months than NIFTY-50 index. ADFFOODS significantly outperformed NIFTY-50 index in Nov 2018, when it returned +32.91% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. ADFFOODS and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both ADFFOODS and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
I'm only rich because I know when I'm wrong..I basically have survived by recognizing my mistakes.
-- George Soros
ADFFOODS is becoming less volatile overall. In comparison, the NIFTY-50 index is seeing a fall in volatility. During the last three months, there was a significant fall in ADFFOODS's volatility from 22 Oct, 2018 to 10 Jan, 2019. While there was a significant fall in the NIFTY-50 index's volatility from 31 Oct, 2018 to 5 Dec, 2018.
Advanced/professional short-term investors should note that ADFFOODS has significant negative skewness in it's return distribution. This indicates that ADFFOODS is very risky for short-term investment and can significantly underperform for long durations.
NIFTY-50 index has more chance of extreme outcomes than ADFFOODS. Therefore, NIFTY-50 must receive a lower allocation than ADFFOODS in your portfolio. NIFTY-50 index usually has shorter drawdown period than ADFFOODS.
On a general note (since you are interested in ADFFOODS), three mid cap instruments that deserve special mention are BATAINDIA, LTTS and LTI. They have all outperformed the market and must be closely watched for investment opportunities.
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