Coastal Corporation Receives 'Hold' Rating from MarketsMOJO, Technical Trend Improves

Coastal Corporation, a microcap company in the aquaculture industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on the company's technical trend, which has improved from Mildly Bullish to Bullish on August 27, 2024. The stock's MACD and KST technical factors are also showing a bullish trend.
In terms of valuation, Coastal Corporation has an attractive ROCE of 2.9 and a low enterprise value to capital employed ratio of 1.2. Additionally, the stock is currently trading at a discount compared to its average historical valuations. Despite generating a negative return of -1.19% in the past year, the company's profits have increased by 253.7%, resulting in a low PEG ratio of 0.4.

However, there are some concerns regarding the company's long-term fundamental strength. Over the last 5 years, Coastal Corporation has seen a -30.49% CAGR growth in operating profits, indicating weak performance. The company also has a high debt to EBITDA ratio of 5.68, which may affect its ability to service debt. Furthermore, the return on capital employed (avg) is at 9.12%, suggesting low profitability per unit of total capital.

In the latest quarter, Coastal Corporation's results were flat, with a -36.87% decrease in PBT LESS OI(Q) at Rs 2.38 crore and a 22.10% increase in INTEREST(9M) at Rs 12.65 crore. The company's debt-equity ratio (HY) is also at its highest at 1.28 times.

In the past year, Coastal Corporation has underperformed the market, with negative returns of -1.19% compared to the market's 39.59% returns (BSE 500). This may be a cause for concern for investors.

Overall, while Coastal Corporation's technical trend and attractive valuation may make it a 'Hold' for now, its weak long-term fundamental strength and underperformance in the market should be taken into consideration by investors.