Waiting to invest in HIL? Look for alternatives because it performed worse than the broader market
22 Jan, 201913 min read
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HIL LIMITED performed worse than the broader market on Tuesday. It delivered -1.46% to close at 1967.45. It is currently trading -22% below it's 52 week high of 2540.4.
HIL showed a bullish trend over the last 3 months. During this period HIL surged by +1.34% and saw a maximum drawdown of -15.21%. There were 3 long signals during this period that returned a cumulative of +2.75% to investors.
HIL has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 26 Feb, 2016 to 11 Sep, 2018. Over the last 3 years and 1 month, HIL outperformed the NIFTY-50 index on 52% days.
HIL returned losses on 54% 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 +4.87%, during this period, on Tuesday, 11 Dec, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 23 Oct, 2018 and went on till 31 Oct, 2018. This bullish trend returned +14.76% to investors.
The last 12 months saw HIL's investors making profits in 6 months and incurring losses in 6 months. During the last year, HIL delivered profits in more months than NIFTY-50 index. HIL significantly outperformed NIFTY-50 index in Apr 2018, when it returned +30.07% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. HIL and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both HIL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
Time is more value than money. You can get more money, but you cannot get more time.
-- Jim Rohn
HIL 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 HIL's volatility from 25 Oct, 2018 to 15 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 HIL 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.
HIL has more chance of extreme outcomes than the NIFTY-50 index. Therefore, HIL must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than HIL.
On a general note (since you are interested in HIL), if you are an investor in IEX, you need to be extra careful (consider limiting your exposure or diversifying) as it is extremely unpredictable and therefore risky.
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