National Peroxide Downgraded to 'Sell' by MarketsMOJO

National Peroxide, a microcap company in the chemicals industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 30, 2023. This decision was based on several factors that indicate poor long-term growth potential for the company.
One of the main reasons for the downgrade is the company's negative growth in net sales and operating profit over the last 5 years, with an annual rate of -6.83% and -35.58%, respectively. This trend is also reflected in the technical analysis, with the stock currently in a bearish range and both the MACD and KST technical factors showing a bearish trend.

Another concerning factor is the low ownership of the company by domestic mutual funds, with only 0% stake. This could indicate that these funds are not comfortable with the company's current price or business, as they have the capability to conduct in-depth research on companies.

Furthermore, National Peroxide has consistently underperformed against the benchmark BSE 500 index over the last 3 years, with a negative return of -30.06% in the last 1 year alone.

On a positive note, the company has a low debt to equity ratio and has declared positive results for the last 5 consecutive quarters. Its profits have also seen a significant growth of 3,249.99% in PAT (HY) and 33.48% in net sales (HY). However, its return on capital employed (ROCE) is still relatively low at 5.09%.

In terms of valuation, the company has a fair ROE of 3.4 and a price to book value of 0.6, indicating a fair valuation. Additionally, the stock is currently trading at a discount compared to its historical valuations.

Overall, the downgrade to 'Sell' by MarketsMOJO highlights the concerns surrounding National Peroxide's long-term growth potential. Investors should carefully consider these factors before making any investment decisions.