GUJARAT PIPAVAV PORT LTD was among the worst performers on Friday. It fell by -1.44% to close at 92.4. On a day when the overall market breadth was 71%, it closed higher than 31% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.
GPPL showed a strong bearish trend over the last 3 months. During this period GPPL fell by -11.24% and saw a maximum drawdown of -13.69%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in GPPL till volatility reduces and a clear trend emerges.
GPPL has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 4 Apr, 2016 to 15 Jan, 2019. Over the last 3 years and 1 month, GPPL underperformed the NIFTY-50 index on 56% days.
During the last three months GPPL was mostly loss making and delivered on average -0.17% per day. It's best return during this period (of +9.94%) was on Wednesday, 12 Dec, 2018. While it's worst loss in the same period (of -5.13%) was on Monday, 7 Jan, 2019. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +1.24%) started on 21 Nov, 2018 and went on till 28 Nov, 2018 while the bearish trend (which returned -7.28%) started on 1 Jan, 2019 and went on till 7 Jan, 2019.
During the last year GPPL had 4 profitable months and 8 loss making months. GPPL returned profits in fewer months than NIFTY-50 index. GPPL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -22.67% compared to -6.42% returned by NIFTY-50 index in Sep 2018. GPPL had a longer winning streak of losing months than NIFTY-50 index. It went down in 4 straight months (from Aug 2018 to Nov 2018) during which period it delivered -17.14%. It is interesting to note that both GPPL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
"Money is like manure. You have to spread it around or it smells.
GPPL is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in GPPL's volatility from 22 Oct, 2018 to 27 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 GPPL has significant negative skewness in it's return distribution. This indicates that GPPL is very risky for short-term investment and can significantly underperform for long durations.
GPPL has more chance of extreme outcomes than the NIFTY-50 index. Therefore, GPPL must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than GPPL.
Based on your interest in GPPL you may find it interesting to know that ONGC has delivered similar performance as GPPL and can be considered as an alternative investment candidate (to GPPL).
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