Deep Energy Resources Downgraded to 'Sell' by MarketsMOJO: Weak Fundamentals Raise Concerns

Deep Energy Resources, a microcap company in the oil exploration and refineries industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 6, 2023. This downgrade is based on the company's weak long-term fundamental strength, as it has been operating at a loss and has a low return on equity of 5.43%.
In the latest quarter, the company's results have been flat with the lowest PBDIT (profit before depreciation, interest, and taxes) at Rs -0.52 crore. Additionally, the operating profit to net sales and PBT (profit before tax) less other income have also been at their lowest levels. This indicates a decline in profitability for the company.

Furthermore, with a ROE of 0.1, Deep Energy Resources is currently trading at a premium compared to its historical valuations. Despite generating a return of 21.33% in the past year, the company's profits have fallen by -80.2%. This raises concerns about the company's financial stability and growth potential.

Another concerning factor is that domestic mutual funds hold only 0% of the company, despite their capability to conduct in-depth research on companies. This could suggest that they are not comfortable with the company's current price or its business.

On a positive note, the stock is currently in a bullish range and the technical trend has improved from mildly bullish on December 5, 2023. Multiple technical indicators, such as MACD, Bollinger Band, and OBV, also suggest a bullish outlook for the stock.

In conclusion, while Deep Energy Resources may seem like an attractive investment due to its microcap size, it is important to consider the company's weak fundamentals and the lack of interest from domestic mutual funds. Investors should carefully evaluate all factors before making any investment decisions.