Deco-Mica Receives 'Hold' Rating from MarketsMOJO Amid Bullish Trend and Attractive Valuation

Deco-Mica, a microcap company in the wood products industry, has recently received a 'Hold' rating from MarketsMOJO on February 5th, 2024. This upgrade comes as the stock has shown a bullish trend and has improved from a mildly bullish to a bullish range. Technical indicators such as MACD, Bollinger Band, and OBV are also showing positive signs for the stock.
One of the main reasons for the 'Hold' rating is the company's attractive valuation with a ROCE of 11.3 and an enterprise value to capital employed ratio of 1.2. Additionally, the stock is currently trading at a discount compared to its historical valuations. However, the company's profits have only risen by 0.5% in the past year, resulting in a high PEG ratio of 15.3.

Deco-Mica's majority shareholders are promoters, which can be seen as a positive sign for the company. However, the company's long-term fundamental strength is weak with an average ROCE of 9.48%. Its growth has also been poor, with net sales and operating profit only growing at an annual rate of 7.09% and 7.79%, respectively, over the last 5 years. The company also has a high debt to EBITDA ratio of 3.74 times, indicating a low ability to service debt.

In terms of performance, Deco-Mica has underperformed the market in the last year, generating a return of 15.13% compared to the market's (BSE 500) return of 31.75%. These factors contribute to the 'Hold' rating for the stock, as it may not be a strong buy at the moment. Investors should carefully consider these factors before making any decisions regarding Deco-Mica stock.