300.6 -8.17 (-2.72%) Buy

WABAG investors herd to book profits while the going is good

13 min read

VA TECH WABAG LTD significantly underperformed today. It delivered -2.72% to close at 300.6. During the last week it delivered -0.18% and saw a maximum drawdown of -2.72% before bouncing back.

[Themes containing WABAG]

WABAG is currently in a bullish trend. Over the last three months 2 bullish signals in WABAG have generated a profit of +6.94% for investors.


WABAG has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 8 Jan, 2016 to 1 Jan, 2019. Over the last 3 years and 1 month, WABAG underperformed the NIFTY-50 index on 55% days.

WABAG returned losses on 51% days in the last three months. During this time, it delivered on average +0.31% per day. It delivered it's best daily return of +14.62%, during this period, on Thursday, 10 Jan, 2019. The longest stort-term trend during this period was 8 losing days, which started on 20 Nov, 2018 and ended on 30 Nov, 2018. This bearish trend lost -12.15% of investor capital.

The last 12 months saw WABAG's investors making profits in 4 months and incurring losses in 8 months. WABAG was less consistent in delivering monthly returs than NIFTY-50 index. WABAG was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -24.24% compared to -6.42% returned by NIFTY-50 index in Sep 2018. WABAG had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from May 2018 to Jul 2018) during which period it delivered -31.5%. It is interesting to note that both WABAG and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

The hardest thing to understand in the world is the income tax.
-- Albert Einstein

WABAG is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant surge in WABAG's volatility from 2 Jan, 2019 to 10 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 WABAG has significant negative skewness in it's return distribution. This indicates that WABAG is very risky for short-term investment and can significantly underperform for long durations.

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

Based on your interest in WABAG you may find it interesting to know that BATAINDIA and LTTS are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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