NITCO LIMITED

41.65 +0.2 (+0.48%) Buy

Don't lose faith in NITCO now, it delivered good returns

13 min read

NITCO performed better than the broader market today. On a longer term basis, investors in NITCO LIMITED made +0.13% per day. Friday's performance of +0.48% was a significant outperformance compared to it's daily average.

[Themes containing NITCO]

NITCO showed a strong up trend over the last 3 months. During this period NITCO returned +18.66% and saw a maximum drawdown of -19.71%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in NITCO till volatility reduces and a clear trend emerges.

Trend

NITCO has been outperforming the NIFTY-50 index in recent time. Over the last 3 years and 1 month, NITCO underperformed the NIFTY-50 index on 59% days.

During the last three months NITCO delivered losses on 59% days. However, it still managed to end this period in a profit. It's best return during this period (of +18.09%) was on Friday, 14 Dec, 2018. While it's worst loss in the same period (of -6.26%) was on Monday, 10 Dec, 2018. There was initially a bullish trend during this period which started on 11 Dec, 2018 and went on till 17 Dec, 2018. The bullish trend returned +43.56% to investors. This was followed by a bearish trend that started on 18 Dec, 2018 and ended on 26 Dec, 2018. This bearish trend lost -8.5% of investor capital.

NITCO had 3 profitable and 9 loss making months over the last year. During the last year, NITCO underperformed NIFTY-50 index on monthly return basis. NITCO was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -35.62% compared to -6.42% returned by NIFTY-50 index in Sep 2018. NITCO had a longer winning streak of losing months than NIFTY-50 index. It went down in 5 straight months (from Feb 2018 to Jun 2018) during which period it delivered -59.94%. It is interesting to note that both NITCO and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Never invest emergency savings in the stock market.
-- Suze Orman

NITCO 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 NITCO's volatility from 22 Oct, 2018 to 21 Nov, 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 NITCO has significant negative skewness in it's return distribution. This indicates that NITCO is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in NITCO), two instruments that deserve special mention are LTI and NIITTECH. They have significantly outperformed the overall market this year.

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