Don't buy APLLTD now, it is underperforming the market
18 Jan, 201915 min read
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ALEMBIC PHARMA LTD performed worse than the broader market on Friday. It fell by -0.49% to close at 588.5. On a day when the overall market breadth was 71%, it closed higher than 60% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
APLLTD showed a bearish trend over the last 3 months. During this period APLLTD fell by -3.2% and saw a maximum drawdown of -9.48%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in APLLTD till volatility reduces and a clear trend emerges.
APLLTD has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 12 Jan, 2016 to 7 Jun, 2018. Over the last 3 years and 1 month, APLLTD underperformed the NIFTY-50 index on 53% days.
APLLTD returned losses on 58% days in the last three months. During this time, it delivered on average -0.04% per day. It delivered it's best daily return of +8.11%, during this period, on Friday, 30 Nov, 2018. The longest stort-term trend during this period was 8 losing days, which started on 14 Dec, 2018 and ended on 26 Dec, 2018. This bearish trend lost -9.26% of investor capital.
During the last year APLLTD had 5 profitable months and 7 loss making months. Profitable number of months of APLLTD and NIFTY-50 index were the same. APLLTD was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -20.1% compared to -6.42% returned by NIFTY-50 index in Sep 2018. APLLTD had a longer winning streak of profitable months than NIFTY-50 index. It went up in 4 straight months (from Jun 2018 to Sep 2018) during which period it delivered +40.25%.
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APLLTD is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in APLLTD's volatility from 23 Oct, 2018 to 14 Nov, 2018. 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 APLLTD 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.
NIFTY-50 index has more chance of extreme outcomes than APLLTD. Therefore, NIFTY-50 must receive a lower allocation than APLLTD in your portfolio. NIFTY-50 index usually has shorter drawdown period than APLLTD.
Based on your interest in APLLTD you may find it interesting to know that RAMCOCEM and CERA have both performed similar to APLLTD and can be considered by investors as alternative investment options.
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