COSCO (India) Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals

COSCO (India), a microcap company in the leather industry, has recently been downgraded to a 'Sell' by MarketsMOJO on 2024-05-28. This decision is based on the company's weak long-term fundamental strength, with a -0.87% CAGR growth in operating profits over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 0 times, indicating a low ability to service debt. The return on equity (avg) of 5.73% also suggests low profitability per unit of shareholders' funds.
However, the company has declared positive results for the last 3 consecutive quarters, with its operating profit to interest (Q) being the highest at 2.40 times and PBDIT (Q) at Rs 2.97 cr. The operating profit to net sales (Q) is also at its highest at 7.30%. Technically, the stock is in a mildly bullish range, with its MACD and KST technical factors also being bullish.

With a ROCE of 9.1, the stock has a fair valuation with a 1.9 enterprise value to capital employed. It is also currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 93.75%, while its profits have risen by 44.8%. The PEG ratio of the company is 1.3.

The majority shareholders of COSCO (India) are the promoters, and the company has shown market-beating performance in both the long term and near term. In addition to its 93.75% return in the last year, the stock has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months. While the stock may currently be facing some challenges, it has shown potential for growth and profitability in the past. Investors should carefully consider all factors before making any investment decisions.