MarketsMOJO Upgrades Snowman Logistics to 'Hold' Rating Amidst Healthy Long-Term Growth

Snowman Logistics, a smallcap logistics company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes as the company has shown healthy long-term growth with an annual operating profit growth rate of 16.53%.
Technically, the stock is in a mildly bullish range with its Bollinger Band and DOW technical factors also showing a mildly bullish trend. Additionally, with a ROCE of 6.5, the stock is currently trading at an attractive valuation with an enterprise value to capital employed ratio of 2.1. This is a discount compared to its average historical valuations.

However, over the past year, the stock has generated a return of 28.29%, while its profits have fallen by -25.3%. This could be a cause for concern for investors.

On a positive note, the promoters of Snowman Logistics have increased their stake in the company by 1.19% over the previous quarter, currently holding 46.43% of the company. This is a sign of high confidence in the future of the business.

However, the company's ability to service its debt is weak with a poor EBIT to interest (avg) ratio of 1.16. This could be a potential risk for investors to consider. Additionally, the company has a low return on equity (avg) of 1.33%, indicating low profitability per unit of shareholders' funds.

In the latest quarter, Snowman Logistics reported negative results with a fall in PAT(Q) at Rs 0.61 crore, a decrease of -79.2%. The operating profit to interest (Q) ratio was also at its lowest at 3.48 times, while PBDIT(Q) was at its lowest at Rs 22.04 crore.

Overall, while Snowman Logistics has shown potential for long-term growth, its recent financial performance and weak debt-servicing ability may be a cause for concern. Investors are advised to hold onto their stocks for now and monitor the company's performance closely.