Don't go shopping for MRO-TEK now, it is underperforming the market
22 Jan, 201914 min read
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MRO-TEK REALTY LIMITED is a falling knife that can bleed you if you catch it today. It delivered -1.96% to close at 42.5. It's recent 5 day performance has been -0.12%, +5.08%, -1.9%, -0.36% and -0.59%.
MRO-TEK showed a strong bearish trend over the last 3 months. During this period MRO-TEK delivered -12.37% and saw a maximum drawdown of -16.73%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in MRO-TEK till volatility reduces and a clear trend emerges.
MRO-TEK has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 27 Sep, 2016 to 23 Apr, 2018. Over the last 3 years and 1 month, MRO-TEK underperformed the NIFTY-50 index on 53% days.
During the last three months MRO-TEK was mostly loss making and delivered on average -0.16% per day. It's best return during this period (of +9.93%) was on Thursday, 29 Nov, 2018. While it's worst loss in the same period (of -6.16%) was on Tuesday, 13 Nov, 2018. The longest stort-term trend during this period was 5 losing days, which started on 14 Dec, 2018 and ended on 20 Dec, 2018. This bearish trend lost -8.0% of investor capital.
The last 12 months saw MRO-TEK's investors making profits in 5 months and incurring losses in 7 months. During the last year, MRO-TEK and NIFTY-50 index had the same number of profitable months. MRO-TEK significantly outperformed NIFTY-50 index in Jun 2018, when it returned +80.61% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. MRO-TEK had a longer winning streak of profitable months than NIFTY-50 index. It went up in 5 straight months (from Feb 2018 to Jun 2018) during which period it delivered +100.64%. It is interesting to note that both MRO-TEK and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
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MRO-TEK 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 MRO-TEK's volatility from 23 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 MRO-TEK has positive skewness in it's return distribution. This indicates that investors can expect MRO-TEK to make attempts to recover from drawdowns quickly. Which makes MRO-TEK a good candidate for momentum based trading on short-term bullish trends or counter-trends.
NIFTY-50 index has more chance of extreme outcomes than MRO-TEK. Therefore, NIFTY-50 must receive a lower allocation than MRO-TEK in your portfolio. MRO-TEK usually has shorter drawdown period than the NIFTY-50 index.
On a general note (since you are interested in MRO-TEK), two instruments that have delivered similar performance as MRO-TEK are WEIZMANIND and SPLIL. They are suitable as good alternative investment candidates that can diversify your portfolio.
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