MarketsMOJO downgrades Kabsons Industries to 'Sell' due to weak fundamentals and expensive valuation

Kabsons Industries, a microcap company in the industrial gases and fuels industry, has recently received a 'Sell' rating from MarketsMOJO on October 7th, 2024. This downgrade is based on the company's weak long-term fundamental strength, with a -13.30% CAGR growth in operating profits over the last 5 years. Additionally, the company's ability to service its debt is also a concern, with a poor EBIT to Interest (avg) ratio of 0.49. One of the main reasons for the 'Sell' rating is the company's expensive valuation, with a price to book value of 5.5 and a ROE of 20.8. This is significantly higher than its average historical valuations. Despite a 193.93% return in the past year, the company's profits have only risen by 51.5%, resulting in a PEG ratio of 0.5. Other factors that contribute to the 'Sell' rating include the company's positive results for the last 8 consecutive quarters, with a growth of 80.41% in net sales. Technically, the stock is in a mildly bullish range, with both the MACD and KST technical factors showing a bullish trend. The majority shareholders of Kabsons Industries are promoters, indicating their confidence in the company. However, despite its market-beating performance in the long term, the stock has underperformed compared to BSE 500 in the last 3 years, 1 year, and 3 months. In conclusion, while Kabsons Industries has shown positive results in the past, its weak long-term fundamentals and expensive valuation make it a 'Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.