Don't go shopping for KABRAEXTRU now, it is underperforming the market

KABRA EXTRUSION TECHNIK L underperformed on Friday. It delivered -1.39% to close at 74.3. 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%.

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KABRAEXTRU showed a bullish trend over the last 3 months. During this period KABRAEXTRU surged by +3.77% and saw a maximum drawdown of -10.51%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in KABRAEXTRU till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

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Volatility

Return distribution

KABRAEXTRU has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 21 Jun, 2017 to 9 Oct, 2018. Over the last 3 years and 1 month, KABRAEXTRU underperformed the NIFTY-50 index on 54% days.

KABRAEXTRU returned losses on 54% days in the last three months. During this time, it delivered on average +0.08% per day. It delivered it's worst daily return of -6.72%, during this period, on Friday, 21 Dec, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 29 Oct, 2018 and went on till 2 Nov, 2018. This bullish trend returned +7.98% to investors.

The last 12 months saw KABRAEXTRU's investors making profits in 2 months and incurring losses in 10 months. KABRAEXTRU was less consistent in delivering monthly returs than NIFTY-50 index. KABRAEXTRU was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -15.57% compared to -6.42% returned by NIFTY-50 index in Sep 2018. KABRAEXTRU had a longer winning streak of losing months than NIFTY-50 index. It went down in 8 straight months (from Mar 2018 to Oct 2018) during which period it delivered -51.61%. It is interesting to note that both KABRAEXTRU and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.
-- Robert G. Allen

KABRAEXTRU 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 KABRAEXTRU's volatility from 21 Dec, 2018 to 17 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 KABRAEXTRU has significant negative skewness in it's return distribution. This indicates that KABRAEXTRU is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in KABRAEXTRU you may find it interesting to know that CUB, LTI and BATAINDIA are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.