MarketsMOJO Upgrades Ugar Sugar Works to 'Hold' Rating, Despite Concerns Over Debt and Underperformance

Ugar Sugar Works, a microcap company in the sugar industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on the company's healthy long-term growth, with an annual increase of 8.82% in net sales and 51.98% in operating profit. The technical trend has also improved from Mildly Bearish to Mildly Bullish, with the Bollinger Band and KST technical factors also showing a bullish trend.
However, Ugar Sugar Works has a high debt-to-equity ratio of 4.92 times, which may be a cause for concern. In addition, the company's results for June 2024 were flat. With a ROCE of 39.7, the stock is considered to be expensive, with an enterprise value to capital employed ratio of 3.1. Despite this, the stock is currently trading at a discount compared to its historical valuations.

Over the past year, Ugar Sugar Works has underperformed the market, with a negative return of -26.17%. This is in contrast to the market's positive return of 37.46% during the same period. It is worth noting that despite being a microcap company, domestic mutual funds hold only 0% of the company. This could indicate that they are not comfortable with the stock's current price or the business itself.

In conclusion, while Ugar Sugar Works has shown promising growth in the long term, its high debt and underperformance in the market may be a cause for concern. Investors should carefully consider these factors before making any investment decisions.