Forbes & Company Receives 'Hold' Rating Amidst Bullish Trend and Concerns Over Financials.

Forbes & Company, a microcap company in the engineering industry, has recently received a 'Hold' rating from MarketsMOJO on October 15, 2024. This upgrade comes as the stock has shown a bullish trend and has outperformed the BSE 500 index in the last 3 years, 1 year, and 3 months. However, there are some factors that investors should consider before making any investment decisions.
One of the main reasons for the 'Hold' rating is the company's high debt to EBITDA ratio of 5.61 times, indicating a low ability to service debt. This could potentially lead to financial strain for the company in the long term. Additionally, Forbes & Company has shown poor growth in the last 5 years, with net sales and operating profit declining at an annual rate of -41.10% and -26.03%, respectively.

In the latest quarter, the company's results were also negative, with a fall in net sales, PBT less OI, and PAT. This could be a cause for concern for investors, as it shows a decline in the company's performance.

Furthermore, Forbes & Company has a very expensive valuation with a price to book value of 6.7 and a ROE of 16. This indicates that the stock is trading at a premium compared to its historical valuations. However, it is currently trading at a discount, with a PEG ratio of 1.2, which takes into account the company's growth potential.

Investors should also take note that 98.25% of the promoter shares are pledged, which could put additional downward pressure on the stock prices in a falling market. This is something to keep in mind while considering an investment in Forbes & Company.

In conclusion, while Forbes & Company has shown a bullish trend and has outperformed the market in the short term, there are some concerns regarding its financials and valuation. Investors should carefully evaluate these factors before making any investment decisions.