MarketsMOJO Upgrades Howard Hotels to 'Hold' Rating Based on Bullish Technical Indicators

Howard Hotels, a microcap company in the hotel, resort, and restaurant industry, has recently received a 'Hold' rating from MarketsMOJO on October 16, 2024. This upgrade is based on various technical indicators that suggest a bullish trend for the stock.
Since September 5, 2024, the stock has shown a significant improvement in its technical trend, resulting in a 9.13% return. This is supported by factors such as MACD, Bollinger Band, KST, DOW, and OBV, all of which are currently bullish for the stock.

In terms of valuation, Howard Hotels has an attractive ROCE of 9 and a low enterprise value to capital employed ratio of 2.1. Additionally, the stock is currently trading at a discount compared to its historical valuations, making it an attractive option for investors.

However, the company's financials paint a different picture. Despite generating a return of 80.64% in the past year, its profits have fallen by -101.7%. This could be a cause for concern for potential investors.

Moreover, the majority shareholders of Howard Hotels are its promoters, which could potentially limit the influence of other investors in the company's decision-making process.

On the positive side, the company has consistently generated returns over the last 3 years, outperforming the BSE 500 index. However, its long-term fundamental strength is weak due to operating losses and poor growth in net sales over the last 5 years.

Furthermore, Howard Hotels has a weak ability to service its debt, with a poor EBIT to interest ratio of -0.27. This could be a red flag for investors looking for a stable and financially sound company.

In the latest quarter, the company's results were flat, with PBDIT(Q) at its lowest at Rs -0.50 cr, PBT LESS OI(Q) at Rs -0.79 cr, and EPS(Q) at Rs -0.85. This indicates a need for improvement in the company's financial performance.

Overall, while Howard Hotels may seem like an attractive option due to its recent technical trend and discounted valuation, investors should carefully consider the company's financials and long-term growth potential before making any investment decisions.