MarketsMOJO Downgrades Nath Bio-Genes (India) to 'Sell' Due to Weak Long-Term Fundamentals

Nath Bio-Genes (India), a microcap company in the agri-seeds industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 22, 2024. This decision was based on weak long-term fundamental strength, with an average Return on Capital Employed (ROCE) of 7.63% and poor long-term growth in net sales and operating profit.
In the last year, the stock has underperformed the market, generating a return of only 0.15% compared to the market's 31.91% return. However, the company has declared positive results for the last six consecutive quarters, with the highest operating cash flow and operating profit to interest ratio. It also has a high dividend per share of Rs 2.00.

The technical trend for the stock is currently sideways, indicating no clear price momentum. The stock's MACD and Bollinger Band technical factors are also sideways, further supporting the 'Sell' recommendation.

Despite its attractive valuation with a price to book value of 0.6 and a return on equity of 6.9, the stock is trading at a discount compared to its historical valuations. In the past year, while the stock has only generated a small return, its profits have risen by 14%, resulting in a low PEG ratio of 0.7.

It is worth noting that the majority of shareholders in Nath Bio-Genes (India) are non-institutional investors. Overall, with weak long-term fundamentals and underperformance in the market, it may be wise for investors to consider selling their shares in this microcap company.