37.5 -0.93 (-2.47%) Buy

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

13 min read

TNPETRO has destroyed investor wealth today. On a longer term basis, investors in TAMILNADU PETROPRODUCTS L made +0.17% per day. Tuesday's performance of -2.47% was a significant underperformance compared to it's daily average.

[Themes containing TNPETRO]

TNPETRO showed a up trend over the last 3 months. During this period TNPETRO returned +8.7% and saw a maximum drawdown of -16.35%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in TNPETRO till volatility reduces and a clear trend emerges.


TNPETRO has been underperforming the NIFTY-50 index in recent time, after having outperformed till 27 Nov, 2017. Over the last 3 years and 1 month, TNPETRO outperformed the NIFTY-50 index on 44% days. Which indicates that on days TNPETRO 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 TNPETRO delivered losses on 59% days. However, it still managed to end this period in a profit. It's best return during this period (of +11.76%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -5.0%) was on Tuesday, 20 Nov, 2018. There was initially a bearish trend during this period which started on 5 Dec, 2018 and went on till 10 Dec, 2018. The trend delivered -5.12% losses to investors. This was followed by a bullish trend that started on 24 Dec, 2018 and ended on 28 Dec, 2018. This bullish trend delivered +1.71% to investors.

TNPETRO had 6 profitable and 6 loss making months over the last year. TNPETRO was profitable in more months than NIFTY-50 index. TNPETRO significantly outperformed NIFTY-50 index in Aug 2018, when it returned +35.41% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. TNPETRO and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both TNPETRO and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Never spend your money before you have earned it.
-- Thomas Jefferson

TNPETRO is becoming more 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 TNPETRO's volatility from 23 Oct, 2018 to 7 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 TNPETRO has significant negative skewness in it's return distribution. This indicates that TNPETRO is very risky for short-term investment and can significantly underperform for long durations.

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

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

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