7.6 -0.24 (-3.18%) Buy

NILAINFRA investors herd to book profits while the going is good

13 min read

NILA INFRASTRUCTURES LTD ranked among the worst performers on Friday. It fell by -3.18% to close at 7.6. On a day when the overall market breadth was 71%, it closed higher than 41% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing NILAINFRA]

NILAINFRA showed a bearish trend over the last 3 months. During this period NILAINFRA fell by -2.56% and saw a maximum drawdown of -22.05%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in NILAINFRA till volatility reduces and a clear trend emerges.


NILAINFRA has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 26 Dec, 2017 to 1 Oct, 2018. Over the last 3 years and 1 month, NILAINFRA underperformed the NIFTY-50 index on 58% days.

During the last three months NILAINFRA delivered losses on 64% days. However, it still managed to end this period in a profit. It's best return during this period (of +11.83%) was on Tuesday, 13 Nov, 2018. While it's worst loss in the same period (of -11.28%) was on Thursday, 15 Nov, 2018. The longest stort-term trend during this period was 9 profitable days, which started on 1 Nov, 2018 and went on till 14 Nov, 2018. This bullish trend returned +39.75% to investors.

During the last year NILAINFRA had 4 profitable months and 8 loss making months. NILAINFRA returned profits in fewer months than NIFTY-50 index. NILAINFRA was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -30.07% compared to -6.42% returned by NIFTY-50 index in Sep 2018. NILAINFRA 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 -53.75%. It is interesting to note that both NILAINFRA and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Persist - don't take no for an answer. If you're happy to sit at your desk and not take any risk, you'll be sitting at your desk for the next 20 years.
-- David Rubenstein

NILAINFRA is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in NILAINFRA's volatility from 22 Oct, 2018 to 14 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 NILAINFRA has significant negative skewness in it's return distribution. This indicates that NILAINFRA is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in NILAINFRA you may find it interesting to know that IEX, IGARASHI and TIDEWATER are all extremely risky investment candidates that must be evaluated carefully. Investors with low risk profile are better off avoiding them till their performance becomes more consistent.

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