Hittco Tools Receives 'Hold' Rating Amid Bullish Trend and Attractive Valuation

Hittco Tools, a microcap engineering company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes as the stock has shown a bullish trend and has generated a return of -3.06% since 06-Feb-24. The company's MACD and KST technical factors are also in a bullish range.
One of the reasons for the 'Hold' rating is the company's attractive valuation with a ROCE of 8.2 and a 1.7 Enterprise value to Capital Employed. Additionally, the stock is currently trading at a discount compared to its average historical valuations. However, it is important to note that over the past year, the stock has generated a return of -0.08%, while its profits have fallen by -74.8%.

The majority shareholders of Hittco Tools are non-institutional investors, which may indicate a lack of confidence in the company's long-term fundamental strength. The company's average ROCE of 5.10% and poor growth in net sales and operating profit over the last 5 years also suggest weak long-term growth potential. Furthermore, the company has a high debt to EBITDA ratio of 3.10 times, indicating a low ability to service debt.

In terms of recent performance, Hittco Tools reported flat results in Sep 23 with an EPS(Q) of Rs 0.03, the lowest in the last few quarters. The stock has also underperformed the market (BSE 500) in the last 1 year, generating negative returns of -0.08% while the market has seen a return of 30.22%.

Overall, while the recent technical trend and attractive valuation may make Hittco Tools a 'Hold' for now, the company's weak long-term fundamental strength and underperformance in the market may warrant caution for potential investors.