NBCC (INDIA) LIMITED

57.95 -0.98 (-1.7%) Buy

Search for alternative investments is on for NBCC investors as it performed worse than the broader market

13 min read

NBCC (INDIA) LIMITED has destroyed investor wealth today. It lost -1.7% to close at 57.95. During the last week it lost -2.93% and saw a maximum drawdown of -3.09% before bouncing back.

[Themes containing NBCC]

Buy-and-Hold investors in NBCC experienced a maximum drawdown of -26.58% over the last three months. It gained +9.34% during this up trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals.

Trend

NBCC has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, NBCC underperformed the NIFTY-50 index on 51% days.

NBCC returned losses on 51% days in the last three months. During this time, it delivered on average +0.18% per day. It delivered it's best daily return of +10.02%, during this period, on Wednesday, 19 Dec, 2018. There was initially a bullish trend during this period which started on 29 Oct, 2018 and went on till 5 Nov, 2018. The bullish trend returned +19.38% to investors. This was followed by a bearish trend that started on 20 Nov, 2018 and ended on 26 Nov, 2018. This bearish trend lost -5.3% of investor capital.

NBCC had 4 profitable and 8 loss making months over the last year. During the last year, NBCC underperformed NIFTY-50 index on monthly return basis. NBCC was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jun 2018, returned -18.73% compared to -6.42% returned by NIFTY-50 index in Sep 2018. NBCC had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -34.38%. It is interesting to note that both NBCC and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.
-- Franklin D. Roosevelt

NBCC 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 NBCC's volatility from 19 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 NBCC 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.

Investors trading in NBCC derivatives at this moment can consider 'Long Strangle' options strategy to receive better risk-adjusted returns.

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

On a general note (since you are interested in NBCC), CUB has performed really well this year and deserves to be closely tracked for investment opportunities.

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