MarketsMOJO Downgrades Vivid Global Industries to 'Sell' Due to Weak Fundamentals and Expensive Valuation

Vivid Global Industries, a microcap company in the chemicals industry, has recently received a 'Sell' rating from MarketsMOJO on October 3rd, 2024. This downgrade is based on the company's weak long-term fundamental strength, with a -158.54% 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 1.43.
One of the main reasons for the 'Sell' rating is the company's expensive valuation, with a price to book value of 1.3 and a ROE of 3.8. The stock is currently trading at a premium compared to its average historical valuations. Despite a 0.49% return in the past year, the company's profits have risen by 88%, resulting in a low PEG ratio of 0.1.

In terms of market performance, Vivid Global Industries has underperformed in the last year, with a return of only 0.49% compared to the market (BSE 500) return of 36.98%. However, the company did show positive results in June 2024, with a higher PAT (HY) of Rs 0.15 crore and the highest NET SALES (Q) of Rs 13.19 crore.

From a technical standpoint, the stock is currently in a mildly bullish range, with multiple factors such as MACD, KST, and OBV indicating a bullish trend. It is worth noting that the majority of shareholders in the company are non-institutional investors.

In conclusion, while Vivid Global Industries may have shown some positive results in the recent past, the overall weak fundamental strength and expensive valuation make it a 'Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.