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 February 12, 2024. This decision was based on the company's poor long-term growth, with net sales and operating profit declining at an annual rate of -5.35% and -9.74%, respectively, over the last 5 years.
In December 2023, the company reported very negative results with a -35.75% decrease in net sales. Additionally, the PBT LESS OI(Q) at Rs 3.08 crore has fallen by -69.83% and the PAT(Q) at Rs 2.97 crore has fallen by -61.7%. The company's ROCE(HY) is also at its lowest at 5.94%.

Despite being a microcap company, domestic mutual funds hold only 0% of the company. This could indicate that they are not comfortable with the company's current price or its business, as they have the capability to conduct in-depth research.

The stock has also underperformed the BSE 500 in the last 3 years, 1 year, and 3 months, with a -2.86% return in the last year. The company's low debt to equity ratio (avg) of 0.30 times is a positive factor, but the stock is currently in a mildly bullish range.

However, there are some bullish factors for the stock, such as the technical trend improving from mildly bullish on January 9, 2024, and generating -5.3% returns since then. The MACD, Bollinger Band, KST, and OBV also suggest a bullish trend.

With a ROCE of 6.7, the stock is currently trading at an attractive valuation with a 1.5 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations. However, despite generating a return of -2.86% in the past year, the company's profits have fallen by -67.2%.

In conclusion, while Apex Frozen Foods may seem like an attractive investment due to its low debt and bullish technical indicators, its poor long-term growth and underperformance in the market suggest that it may not be a wise investment choice at this time. Investors should carefully consider all factors before making any decisions regarding this microcap company.