AVG Logistics Receives 'Hold' Rating from MarketsMOJO, Institutional Interest Increases

AVG Logistics, a microcap logistics company, has recently received a 'Hold' rating from MarketsMOJO on May 31, 2024. The stock is currently in a Mildly Bullish range and a key technical factor, the DOW, has been Bullish since May 29, 2024.

One of the main reasons for the 'Hold' rating is the company's attractive valuation with a ROCE of 11 and a 2.1 Enterprise value to Capital Employed. However, the stock is currently trading at a premium compared to its average historical valuations. Despite this, the stock has generated a return of 118.07% in the past year, with profits rising by 178%. The PEG ratio of the company is also at a low 0.2.

Institutional investors have also shown an increasing interest in the company, with their stake rising by 1.51% in the previous quarter. They hold a collective 9.46% of the company, which gives them better capability and resources to analyze the company's fundamentals compared to retail investors.

AVG Logistics has also outperformed the market (BSE 500) with a return of 118.07% in the last year, compared to the market's 32.81% returns.

However, there are some concerns regarding the company's ability to service its debt, as it has a high Debt to EBITDA ratio of 3.45 times. This could potentially impact the company's long-term growth, as evidenced by its Net Sales growing at an annual rate of 8.90% and Operating profit at 16.34% over the last 5 years.

The company has also declared negative results in March 2024 after two consecutive positive quarters. PBT LESS OI(Q) at Rs 4.44 crore has fallen by -84.92%, while PAT(Q) at Rs 11.68 crore has fallen by -58.2%. The OPERATING PROFIT TO NET SALES (Q) is also at its lowest at 15.52%.

Overall, while AVG Logistics has shown strong performance in the past year, there are some concerns regarding its debt and long-term growth. Investors are advised to hold onto their stocks and monitor the company's performance closely.