Apollo Micro Systems Downgraded to 'Sell' by MarketsMOJO Due to Technical Indicators and Expensive Valuation.

Apollo Micro Systems, a smallcap company in the electronics components industry, has recently been downgraded to a 'Sell' by MarketsMOJO on 2024-11-11. This decision was based on various technical indicators such as MACD, Bollinger Band, and KST, which all point towards a bearish trend for the stock.
One of the main reasons for the downgrade is the stock's expensive valuation, with a ROCE of 12.3 and an enterprise value to capital employed ratio of 4.2. Additionally, the stock is currently trading at a discount compared to its historical valuations.

Another concerning factor is the high percentage of promoter shares that are pledged, which can put downward pressure on the stock prices in falling markets. This percentage has also increased by 7.85% in the last quarter.

In the past year, while the stock has generated negative returns of -15.96%, its profits have actually increased by 105%. However, the PEG ratio of the company is 1.2, indicating that the stock may be overvalued.

On a positive note, Apollo Micro Systems has shown healthy long-term growth with an annual operating profit growth rate of 34.51%. In September 2024, the company declared outstanding results with a net profit growth of 139.79%. It has also consistently declared positive results for the last 5 quarters, with its ROCE and operating profit to interest ratios being the highest in the industry.

Despite these positive factors, the stock has significantly underperformed the market (BSE 500) in the last year, which has generated returns of 30.30%. Investors should carefully consider these factors before making any investment decisions regarding Apollo Micro Systems.