SICAL investors herd to book profits while the going is good

SICAL LOGISTICS LIMITED is a falling knife that can bleed you if you catch it on Friday. It fell by -2.11% to close at 143.65. On a day when the overall market breadth was 71%, it closed higher than 53% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

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SICAL showed a bearish trend over the last 3 months. During this period SICAL fell by -5.12% and saw a maximum drawdown of -12.57%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in SICAL till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

SICAL has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 28 Feb, 2017 to 18 Jan, 2019. One must note that SICAL is currently at it's worst performance to the NIFTY-50 index which makes it a bad investment candidate. Over the last 3 years and 1 month, SICAL underperformed the NIFTY-50 index on 56% days.

During the last three months SICAL was mostly loss making and delivered on average -0.06% per day. It's best return during this period (of +8.56%) was on Wednesday, 14 Nov, 2018. While it's worst loss in the same period (of -5.44%) was on Friday, 21 Dec, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 29 Oct, 2018 and went on till 2 Nov, 2018. This bullish trend returned +7.9% to investors.

During the last year SICAL had 3 profitable months and 9 loss making months. SICAL returned profits in fewer months than NIFTY-50 index. SICAL was also a more risky investment than NIFTY-50 index as it's worst month in the last year, May 2018, returned -9.45% compared to -6.42% returned by NIFTY-50 index in Sep 2018. SICAL had a longer winning streak of losing months than NIFTY-50 index. It went down in 7 straight months (from Mar 2018 to Sep 2018) during which period it delivered -32.54%. It is interesting to note that both SICAL and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

When buying shares, ask yourself, would you buy the whole company?
-- Rene Rivkin

SICAL 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 SICAL's volatility from 25 Oct, 2018 to 3 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 SICAL has significant negative skewness in it's return distribution. This indicates that SICAL is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in SICAL you may find it interesting to know that INFY, BRITANNIA and TCS are large caps that have all shown remarkable performance and qualify to be on every investor's watchlist.