Redington Receives 'Buy' Rating from MarketsMOJO, Shows Strong Long-Term Growth and Attractive Valuation

Redington, a midcap IT hardware company, has recently received a 'Buy' rating from MarketsMOJO on January 8, 2024. This upgrade is based on the company's strong long-term fundamental strength, with an average Return on Capital Employed (ROCE) of 34.97%. Additionally, Redington has shown healthy long-term growth in both net sales and operating profit, with annual rates of 14.84% and 20.97%, respectively. The company also has a low Debt to Equity ratio, making it a financially stable choice for investors.
Technically, the stock is currently in a Mildly Bullish range and has shown improvement from its previous Mildly Bearish trend. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish outlook for the stock.

Attractive valuation is another reason to consider buying Redington's stock, with a ROCE of 20.8 and an Enterprise value to Capital Employed ratio of 1.8. However, it is trading at a premium compared to its historical valuations. In the past year, the stock has generated a return of -0.88%, while its profits have fallen by -13.7%. On the positive side, the company offers a high dividend yield of 4%.

Redington also has a high institutional holding of 73.67%, indicating that these investors have better resources and capabilities to analyze the company's fundamentals compared to retail investors.

However, there are some risks associated with investing in Redington. The company's results for September 2023 were flat, and its Operating Cash Flow was at its lowest at Rs -3,233.52 Cr. Additionally, its PBT LESS OI(Q) has fallen by -16.6%, and its PAT(Q) has fallen by -8.4%. In the last year, Redington has underperformed the market, generating negative returns of -0.88% while the market (BSE 500) has generated returns of 26.22%.

In conclusion, Redington's recent 'Buy' rating from MarketsMOJO is based on its strong long-term fundamentals and bullish technical indicators. However, investors should also consider the risks associated with the company, such as its underperformance in the market and recent flat results.