Nuvoco Vistas Corporation Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals and High Debt

Nuvoco Vistas Corporation, a midcap cement company, has recently been downgraded to 'Sell' by MarketsMOJO. This decision was based on the company's weak long-term fundamental strength, with a -30.41% CAGR growth in operating profits over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 4.51 times, indicating a low ability to service debt. Furthermore, Nuvoco Vistas Corporation has reported losses, resulting in a negative return on equity.
In the past year, the stock has underperformed the market, generating a return of only 0.99% compared to the market's return of 31.75%. Other factors that contribute to the 'Sell' rating include the company's positive results in December 2023, with a growth of 115.83% in PAT (HY) and the highest operating profit to interest ratio of 3.08 times. However, the technical trend for the stock is currently sideways, indicating no clear price momentum.

On a positive note, Nuvoco Vistas Corporation has an attractive valuation with a ROCE of 3.1 and a 1.3 enterprise value to capital employed. The stock is also trading at a discount compared to its average historical valuations. However, despite a 0.99% return in the past year, the company's profits have risen by 518.9%, resulting in a PEG ratio of 0.

It is worth noting that the stock has a high institutional holding of 23.02%, indicating that these investors have better capability and resources to analyze the company's fundamentals compared to retail investors. Overall, based on the current information, MarketsMOJO has downgraded Nuvoco Vistas Corporation to 'Sell'.