MarketsMOJO downgrades La Opala RG to 'Sell' due to poor growth and negative results

La Opala RG, a smallcap glass company, has recently been downgraded to a 'Sell' by MarketsMOJO on October 29, 2024. This decision was based on several factors, including poor long-term growth and negative results in the most recent quarter.

Over the last 5 years, the company has only seen a 4.59% annual growth in net sales and a 2.11% growth in operating profit. In the most recent quarter, the net sales have fallen by -20.2% and the PBT (profit before tax) has fallen by -23.4%. Additionally, the non-operating income only makes up 34.76% of the PBT, indicating a reliance on operating income.

With a ROE (return on equity) of 14.4, the stock is currently overvalued with a price to book value of 4.3. It is also trading at a premium compared to its historical valuations. Despite this, the stock has underperformed the market (BSE 500) in the last year, generating negative returns of -21.29% while the market has seen a 35.31% return.

Other factors to consider include the company's low debt to equity ratio and a technical trend that is currently sideways, indicating no clear price momentum. The technical trend has also deteriorated since October 29, 2024, generating -2.37% returns.

It is worth noting that the company has a high institutional holding at 21.16%, which may suggest that these investors have better resources and capabilities to analyze the company's fundamentals compared to retail investors.

Overall, based on the current information and performance, MarketsMOJO has downgraded La Opala RG to a 'Sell' and investors should carefully consider these factors before making any investment decisions.