344.25 -4.2 (-1.22%) Sell

PPAP is a falling knife, continues to bleed every investor trying to catch it

13 min read

PPAP AUTOMOTIVE LIMITED has destroyed investor wealth today. It fell by -1.22% to close at 344.25. During the last week it fell by -2.59% and saw a maximum drawdown of -2.59%.

[Themes containing PPAP]

Buy-and-Hold investors in PPAP experienced a maximum drawdown of -17.91% over the last three months. It fell by -10.12% during this strong bearish trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +6.32%.


PPAP has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 14 Jul, 2016 to 2 Jan, 2018. Over the last 3 years and 1 month, PPAP outperformed the NIFTY-50 index on 47% days. Which indicates that on days PPAP outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.

During the last three months PPAP was mostly loss making and delivered on average -0.15% per day. It's best return during this period (of +6.42%) was on Monday, 17 Dec, 2018. While it's worst loss in the same period (of -4.47%) was on Monday, 10 Dec, 2018. The longest stort-term trend during this period was 8 losing days, which started on 1 Jan, 2019 and ended on 10 Jan, 2019. This bearish trend lost -8.6% of investor capital.

During the last year PPAP had 3 profitable months and 9 loss making months. PPAP returned profits in fewer months than NIFTY-50 index. PPAP was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -24.38% compared to -6.42% returned by NIFTY-50 index in Sep 2018. PPAP had a longer winning streak of losing months than NIFTY-50 index. It went down in 5 straight months (from May 2018 to Sep 2018) during which period it delivered -41.34%. It is interesting to note that both PPAP and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Anybody who plays the stock market not as an insider is like a man buying cows in the moonlight.
-- Daniel Drew

PPAP 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 PPAP's volatility from 24 Oct, 2018 to 3 Dec, 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 PPAP has significant negative skewness in it's return distribution. This indicates that PPAP is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in PPAP you may find it interesting to know that TORNTPHARM is a large cap that has shown remarkable performance and deserves to be on every investors' watchlist.

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