EMCO LIMITED

6.6 -0.1 (-1.49%) Sell

Don't invest in EMCO now, it is a risky investment

13 min read

EMCO LIMITED has destroyed investor wealth today. It returned -1.49% to close at 6.6. It's recent 5 day performance has been -4.29%, -0.71%, -1.4%, -1.38% and -0.68%.

[Themes containing EMCO]

EMCO showed a strong down trend over the last 3 months. During this period EMCO returned -16.46% and saw a maximum drawdown of -28.26%. There was a short signal during this period which returned +19.51%.

Trend

EMCO has been underperforming the NIFTY-50 index in recent time, after having outperformed till 6 Jan, 2016. Over the last 3 years and 1 month, EMCO underperformed the NIFTY-50 index on 56% days.

During the last three months EMCO was mostly loss making and delivered on average -0.25% per day. It's best return during this period (of +4.82%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -7.19%) was on Monday, 10 Dec, 2018. There was initially a bullish trend during this period which started on 25 Oct, 2018 and went on till 2 Nov, 2018. The bullish trend returned +20.4% to investors. This was followed by a bearish trend that started on 10 Jan, 2019 and ended on 18 Jan, 2019. This bearish trend lost -10.63% of investor capital.

On monthly basis, EMCO delivered losses in more months over the last year, than profits. EMCO delivered profits less regularly than NIFTY-50 index. EMCO was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Mar 2018, returned -41.04% compared to -6.42% returned by NIFTY-50 index in Sep 2018. EMCO had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Nov 2018 to Jan 2019) during which period it delivered -26.35%. It is interesting to note that both EMCO and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"Financial crises are like fireworks: they illuminate the sky even as they go pop.

EMCO 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 EMCO's volatility from 25 Oct, 2018 to 1 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 EMCO has significant negative skewness in it's return distribution. This indicates that EMCO is very risky for short-term investment and can significantly underperform for long durations.

EMCO has more chance of extreme outcomes than the NIFTY-50 index. Therefore, EMCO must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than EMCO.

On a general note (since you are interested in EMCO), two large cap instruments that deserve special mention are BRITANNIA and BAJFINANCE. They have significantly outperformed the overall market.

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