RANE ENG VALVE LTD

450.0 -1.74 (-0.39%) Buy

Are you evaluating investing in RANEENGINE? Wait as it underperformed broader market

13 min read

RANE ENG VALVE LTD underperformed broader market on Wednesday. It lost -0.39% to close at 450.0. On a day when the overall market breadth was 70%, it closed higher than 49% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0084%.

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RANEENGINE showed a down trend over the last 3 months. During this period RANEENGINE lost -3.69% . It has been unusually choppy during this period. Long term investors are better off avoiding investing in RANEENGINE till volatility reduces and a clear trend emerges.

Trend

RANEENGINE has been underperforming the NIFTY-50 index in recent time, after having outperformed till 21 Oct, 2016. Over the last 3 years and 1 month, RANEENGINE underperformed the NIFTY-50 index on 55% days.

During the last three months RANEENGINE was mostly loss making and delivered on average -0.06% per day. It's best return during this period (of +3.47%) was on Wednesday, 19 Dec, 2018. While it's worst loss in the same period (of -3.16%) was on Thursday, 25 Oct, 2018. There was initially a bullish trend during this period which started on 30 Oct, 2018 and went on till 7 Nov, 2018. The bullish trend returned +4.33% to investors. This was followed by a bearish trend that started on 2 Jan, 2019 and ended on 8 Jan, 2019. This bearish trend lost -2.31% of investor capital.

RANEENGINE had 5 profitable and 7 loss making months over the last year. RANEENGINE was profitable in more months than NIFTY-50 index. RANEENGINE was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -12.6% compared to -6.42% returned by NIFTY-50 index in Sep 2018. RANEENGINE had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Oct 2018 to Dec 2018) during which period it delivered +1.24%. It is interesting to note that both RANEENGINE and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

But having said that, what's happening with campaign finance reform and our political culture is devastating.
-- Robert McChesney

RANEENGINE 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 RANEENGINE's volatility from 25 Oct, 2018 to 23 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 RANEENGINE has significant negative skewness in it's return distribution. This indicates that RANEENGINE is very risky for short-term investment and can significantly underperform for long durations.

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

On a general note (since you are interested in RANEENGINE), LTTS is a mid cap that deserves to be closely tracked for investment opportunities.

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