274.45 -0.4 (-0.15%) Sell

Stop-loss on the minds of KEC investors as it underperforms

13 min read

KEC INTL. LIMITED underperformed broader market today. It lost -0.15% to close at 274.45. During the last week it lost -1.77% and saw a maximum drawdown of -1.84% before bouncing back.

[Themes containing KEC]

Buy-and-Hold investors in KEC experienced a maximum drawdown of -11.94% over the last three months. It lost -1.47% during this down trending period. There were both Long and Short signals during this period, where the short signals were marginally more profitable than the long signals.


KEC has been underperforming the NIFTY-50 index in recent time, after having outperformed till 18 Apr, 2018. Over the last 3 years and 1 month, KEC outperformed the NIFTY-50 index on 47% days. Which indicates that on days KEC outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months KEC was mostly profitable and delivered on average -0.0% per day. It's best return during this period (of +4.43%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -4.48%) was on Monday, 5 Nov, 2018. There was initially a bullish trend during this period which started on 11 Dec, 2018 and went on till 19 Dec, 2018. The bullish trend returned +13.77% to investors. This was followed by a bearish trend that started on 20 Dec, 2018 and ended on 27 Dec, 2018. This bearish trend lost -7.87% of investor capital.

KEC had 5 profitable and 7 loss making months over the last year. During the last year, number of profitable months of KEC and NIFTY-50 index were the same. KEC significantly outperformed NIFTY-50 index in Feb 2018, when it returned +18.24% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. KEC had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -12.0%. It is interesting to note that both KEC and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

If you do chose to invest in a share, invest for the lifetime.
-- Sandeep Sahajpal

KEC 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 KEC's volatility from 22 Oct, 2018 to 18 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 KEC has significant negative skewness in it's return distribution. This indicates that KEC is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in KEC), two small cap instruments that deserve special mention are VINATIORGA and RESPONIND. They have significantly outperformed the overall market.

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