Bloom Industries Receives 'Hold' Rating After Strong Sales Growth, Technical Improvements

Bloom Industries, a microcap company in the metal-ferrous industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in December 2023, with a significant growth of 226.78% in net sales for the first 9 months of the fiscal year.
Technically, the stock is currently in a mildly bullish range, with the trend improving from mildly bearish on May 8, 2024. One key technical factor, the Bollinger Band, has been bullish since May 8, 2024. Additionally, with a ROCE of 8, the stock is considered to have an attractive valuation with a 1.5 enterprise value to capital employed.

Despite the recent positive performance, the company has weak long-term fundamental strength. Its average ROCE is only 2.38%, and its operating profit has only grown at an annual rate of 12.47% over the last 5 years. Furthermore, the company's ability to service its debt is weak, with a poor EBIT to interest ratio of 0.02.

In the past year, Bloom Industries has underperformed the market, generating a return of 12.92% compared to the BSE 500's return of 33.24%. However, the company's profits have still increased by 11%, resulting in a PEG ratio of 0.9. The majority shareholders of the company are the promoters, indicating their confidence in the company's future prospects.

Overall, while Bloom Industries has shown positive growth in the short term, its long-term fundamentals and debt-servicing ability are areas of concern. Investors are advised to hold the stock for now and monitor its performance closely.