National Fittings Downgraded to 'Sell' by MarketsMOJO Due to Poor Long-Term Growth and Technical Deterioration

National Fittings, a microcap company in the castings/forgings industry, has recently been downgraded to a 'Sell' by MarketsMOJO on May 21, 2024. This decision was based on the company's poor long-term growth, with an annual operating profit growth rate of -5.16% over the last 5 years. Additionally, the company reported negative results in December 2023 after 1 consecutive positive quarters, with a significant decrease in PBT LESS OI(Q) at Rs 1.35 crore, falling at -47.47%, and NET SALES(Q) at its lowest at Rs 16.57 crore.
Technically, the stock is currently in a Mildly Bearish range, with the technical trend deteriorating from Mildly Bullish on May 21, 2024, and generating -6.67% returns since then. A key technical factor, the Bollinger Band, has also been Bearish since May 21, 2024.

In the last 1 year, National Fittings has underperformed the market, with a return of 25.70%, much lower than the market (BSE 500) returns of 36.54%. Other factors to consider include an attractive valuation with a ROCE of 12.9 and a 1.8 Enterprise value to Capital Employed. The stock is also currently trading at a discount compared to its average historical valuations. However, despite the stock's return of 25.70% in the last year, its profits have only risen by 3.6%, resulting in a high PEG ratio of 6.7.

It is worth noting that the majority shareholders of National Fittings are non-institutional investors. As a microcap company in the castings/forgings industry, National Fittings may face challenges in the current market conditions and investors should carefully consider all factors before making any investment decisions.