Subex Receives 'Hold' Rating, But Concerns Remain

Subex, a smallcap IT software company, has recently received a 'Hold' rating from MarketsMOJO. The company's low Debt to Equity ratio, which is at 0 times on average, is one of the main reasons for this upgrade. Additionally, the stock is currently in a Bullish range and the technical trend has improved from Mildly Bullish on 01-Jan-24. Factors such as MACD, Bollinger Band, and KST are also contributing to the bullish sentiment.
However, the company has shown poor long-term growth with a -4.35% annual growth rate in Net Sales and a -208.93% growth rate in Operating profit over the last 5 years. The results for Sep 23 were also flat, with the ROCE(HY) at its lowest at -11.32% and the DEBTORS TURNOVER RATIO(HY) at its lowest at 2.71 times.

One of the major concerns for investors is the negative EBITDA, making the stock a risky investment. In the past year, while the stock has generated a return of 2.27%, its profits have fallen by -2568.2%. This indicates that the stock is trading at a risky level compared to its historical valuations.

Another factor to consider is that despite being a smallcap company, domestic mutual funds hold only 0.08% of the company. This could mean that either they are not comfortable with the current price or they have not done enough research on the company.

In the last 1 year, Subex has underperformed the market with a return of only 2.27%, while the market (BSE 500) has generated a return of 25.12%. This could be a cause for concern for potential investors.

Overall, while Subex may have some positive factors, it is important to consider the risks and underperformance before making any investment decisions.