MSPL investors take a moment to reassess their portfolio allocation

MSP STEEL & POWER LTD. performed worse than the broader market on Tuesday. It delivered -1.18% to close at 12.55. It is currently trading -50% below it's 52 week high of 25.55.

[Themes containing MSPL]

MSPL is currently in a bearish trend. Over the last three months trading short signals has not been a profitable strategy for MSPL's investors in general. However, this strategy had significantly lower risk when compared to Buy-and-Hold investing (which returned -0.4%). It is therefore better to tread with caution in the current downtrend by limiting your allocation to MSPL.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

MSPL has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 12 Feb, 2018 to 28 Aug, 2018. Over the last 3 years and 1 month, MSPL underperformed the NIFTY-50 index on 54% days.

During the last three months MSPL delivered losses on 59% days. However, it still managed to end this period in a profit. It's best return during this period (of +4.82%) was on Monday, 29 Oct, 2018. While it's worst loss in the same period (of -4.28%) was on Thursday, 25 Oct, 2018. The longest stort-term trends during this period were 4 profitable and losing days. The bullish trend (which returned +10.71%) started on 11 Dec, 2018 and went on till 14 Dec, 2018 while the bearish trend (which returned -5.86%) started on 20 Dec, 2018 and went on till 26 Dec, 2018.

The last 12 months saw MSPL's investors making profits in 4 months and incurring losses in 8 months. MSPL was less consistent in delivering monthly returs than NIFTY-50 index. MSPL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Mar 2018, returned -22.54% compared to -6.42% returned by NIFTY-50 index in Sep 2018. MSPL had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Sep 2018 to Nov 2018) during which period it delivered -12.76%. It is interesting to note that both MSPL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

"The road to economic well-being is to reward productive economic activity and to provide a moderate and predictable growth of money to finance real economic growth without reigniting the fires of inflation.

MSPL 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 surge in MSPL's volatility from 24 Oct, 2018 to 30 Oct, 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 MSPL has significant negative skewness in it's return distribution. This indicates that MSPL is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in MSPL), three mid cap instruments that deserve special mention are LTTS, CUB and BATAINDIA. They have all outperformed the market and must be closely watched for investment opportunities.