Apex Frozen Foods Downgraded to 'Sell' by MarketsMOJO Due to Poor Long-Term Growth and Underperformance in Market

Apex Frozen Foods, a microcap company in the aquaculture industry, has recently been downgraded to a 'Sell' by MarketsMOJO on July 16, 2024. This decision was based on the company's poor long-term growth, with net sales declining by an annual rate of -1.67% and operating profit at -9.74% over the last 5 years.
In addition, the company has declared negative results for the last two consecutive quarters, with a fall in operating profit of -6.58% in March 2024. The net sales for the quarter also saw a significant decline of -23.70%, while the profit after tax grew at a slower rate of -30.03%. The return on capital employed (ROCE) for the half-year period was also at its lowest at 4.91%.

Despite being a microcap company, domestic mutual funds hold only 0% of the company, indicating a lack of confidence in the business. This is significant as domestic mutual funds have the capability to conduct in-depth research on companies, and their small stake may suggest that they are not comfortable with the company's current price or business.

In the last year, the stock has underperformed the market, generating a return of only 4.66% compared to the market's (BSE 500) return of 37.74%. The company also has a low debt to equity ratio, which is a positive factor.

Technically, the stock is in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. However, with an ROCE of 4.4, the stock is currently trading at an attractive valuation with a 1.4 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations.

Overall, the stock call on Apex Frozen Foods has been downgraded to 'Sell' due to its poor long-term growth and underperformance in the market. Investors should carefully consider these factors before making any investment decisions.