Federal-Mogul Goetze (India) downgraded to 'Hold' despite positive results

Federal-Mogul Goetze (India) is a smallcap company in the auto ancillary industry. Despite positive results in the last quarter, the stock has been downgraded to a 'Hold' by MarketsMOJO on July 22, 2024. This is due to the company's low Debt to Equity ratio, which is currently at 0 times.
However, there are some positive factors to consider. The company's ROCE (HY) is at its highest at 16.60%, and it has a strong cash position with CASH AND CASH EQUIVALENTS (HY) at Rs 418.17 crore. In addition, PBDIT (Q) is also at its highest at Rs 72.38 crore.

Technically, the stock is in a Mildly Bullish range and both the MACD and KST technical factors are also Bullish. With a ROE of 11.4, the stock has a Very Attractive valuation with a 2.1 Price to Book Value. It is also trading at a discount compared to its average historical valuations. However, the company has shown poor long-term growth with an annual rate of -2.01% in Operating profit over the last 5 years.

Institutional investors have also decreased their stake in the company, holding only 0.54% collectively. This could be a cause for concern as these investors have better resources to analyze company fundamentals. In the last 1 year, the stock has underperformed the market with a return of 12.36%, compared to the market's return of 35.14%.

In conclusion, while Federal-Mogul Goetze (India) has shown positive results in the last quarter, there are some concerns about its long-term growth and institutional investor participation. Investors may want to hold off on buying this stock until there is more clarity on these factors.