Don't consider investing in USHAMART now, it is risky at the moment

USHA MARTIN LTD. underperformed broader market on Tuesday. It returned -1.48% to close at 33.2. On a day when the overall market breadth was 70%, it closed higher than 50% of the market. In comparison, the benchmark NIFTY-50 index closed today at -0.0036%.

[Themes containing USHAMART]

USHAMART showed a strong up trend over the last 3 months. During this period USHAMART grew by +21.17% and saw a maximum drawdown of -27.8%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in USHAMART till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

USHAMART has been underperforming the NIFTY-50 index in recent time, after having outperformed till 14 Nov, 2018. Over the last 3 years and 1 month, USHAMART outperformed the NIFTY-50 index on 42% days. Which indicates that on days USHAMART 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 USHAMART delivered losses on 56% days. However, it still managed to end this period in a profit. It's best return during this period (of +19.92%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -11.71%) was on Tuesday, 8 Jan, 2019. There was initially a bullish trend during this period which started on 30 Oct, 2018 and went on till 5 Nov, 2018. The bullish trend returned +47.86% to investors. This was followed by a bearish trend that started on 20 Nov, 2018 and ended on 28 Nov, 2018. This bearish trend lost -10.04% of investor capital.

On monthly basis, USHAMART delivered profits and losses in equal number of months. USHAMART delivered profits in more months than NIFTY-50 index. USHAMART significantly outperformed NIFTY-50 index in Jun 2018, when it returned +19.26% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. USHAMART had a longer winning streak of profitable months than NIFTY-50 index. It went up in 6 straight months (from Jun 2018 to Nov 2018) during which period it delivered +60.22%. It is interesting to note that both USHAMART and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

The speed of your success is limited only by your dedication and what you're willing to sacrifice.
-- Nathan W. Morris

USHAMART 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 USHAMART's volatility from 30 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 USHAMART has significant negative skewness in it's return distribution. This indicates that USHAMART is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in USHAMART you may find it interesting to know that LTTS, NIITTECH and CUB have all shown remarkable performance this year and deserve to be on every investor's watchlist.