Machino Plastics Receives 'Sell' Rating from MarketsMOJO, Indicating Weak Long-Term Fundamentals

Machino Plastics, a microcap company in the auto ancillary industry, has recently received a 'Sell' rating from MarketsMOJO on January 17, 2024. This downgrade is based on several factors that indicate a weak long-term fundamental strength for the company.
One of the main reasons for the 'Sell' rating is the company's low ability to service debt, with a high Debt to EBITDA ratio of 4.71 times. This means that the company may struggle to pay off its debts in the future. Additionally, Machino Plastics has only seen a -0.98% CAGR growth in operating profits over the last 5 years, indicating a lack of growth and potential financial struggles.

Furthermore, the company's Return on Equity (avg) is at a low 4.34%, which suggests a low profitability per unit of shareholders' funds. This is further supported by the flat results in September 2023.

On a more positive note, the stock is currently in a Mildly Bullish range and its MACD and KST technical factors are also Bullish. Additionally, with a ROCE of 4.9, the stock is considered to have an attractive valuation with a 1.6 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations.

However, despite these positive factors, the stock has only generated a return of 91.50% in the last year, while its profits have only risen by 49.6%. This results in a PEG ratio of 1.4, which is not considered favorable.

It is also worth noting that the majority shareholders of Machino Plastics are the promoters, which may raise concerns about potential conflicts of interest.

In terms of market performance, Machino Plastics has outperformed the BSE 500 in the last 3 years, 1 year, and 3 months. However, with the recent downgrade from MarketsMOJO, investors may want to carefully consider their options before making any decisions regarding this stock.