Hittco Tools Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and High Debt

Hittco Tools, a microcap engineering company, has recently received a 'Sell' rating from MarketsMOJO on November 11, 2024. This downgrade is based on the company's weak long-term fundamental strength, as indicated by its operating losses and poor growth in net sales and operating profit over the last 5 years. Additionally, Hittco Tools has a high debt to EBITDA ratio, which suggests a low ability to service debt. In the latest quarter, the company's results have been flat with its ROCE (HY) at a low of 5.90% and PBDIT (Q) at Rs -0.14 crore. Its PBT LESS OI (Q) is also at a low of Rs -0.35 crore. These factors contribute to the 'Sell' rating given by MarketsMOJO. On a positive note, the stock is currently in a mildly bullish range and its MACD and KST technical factors are also bullish. With a ROCE of 5.5, Hittco Tools has an attractive valuation with a 1.7 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations. However, despite generating a return of 33.18% in the past year, the company's profits have fallen by -54%. Hittco Tools has a majority of non-institutional shareholders and has shown market-beating performance in the long term as well as the near term. In the last 1 year, the stock has outperformed BSE 500 and has also shown strong performance in the last 3 years and 3 months. While the current rating may not be favorable, it is important for investors to keep an eye on the company's future performance and make informed decisions.