Swan Energy Upgraded to 'Hold' Rating by MarketsMOJO, Shows Strong Growth Potential

Swan Energy, a midcap textile company, has recently been upgraded to a 'Hold' rating by MarketsMOJO. This decision is based on the company's healthy long-term growth, with net sales increasing by an annual rate of 105.40% and operating profit at 58.60%. In addition, the company has declared outstanding results for the last 7 consecutive quarters, with a growth in net profit of 84.83%. The company's PAT(Q) has also grown at an impressive rate of 87.7%, with the highest ROCE(HY) at 8.60% and inventory turnover ratio(HY) at 22.00 times.
One of the key factors contributing to the 'Hold' rating is the high institutional holdings at 26.65%. These investors have better capability and resources to analyze the fundamentals of companies, making their stake increase by 1.15% over the previous quarter. Moreover, Swan Energy has consistently generated returns over the last 3 years, outperforming BSE 500 in each of the last 3 annual periods.

However, the company's management efficiency is a concern, with a low ROCE of 1.18%. This signifies low profitability per unit of total capital (equity and debt). Additionally, the company has a high debt to equity ratio (avg) at 2.27 times, which has resulted in reported losses and a negative ROE.

From a technical standpoint, the stock is currently in a mildly bearish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bearish trend. Furthermore, with a ROCE of 9, the stock is considered to have an expensive valuation with a 2.2 enterprise value to capital employed. However, it is currently trading at a discount compared to its average historical valuations.

In the past year, Swan Energy's stock has generated a return of 65.93%, while its profits have risen by 493.5%. This has resulted in a PEG ratio of 0.1, indicating that the stock is undervalued. Overall, while the company has shown strong growth potential, it is important to consider the high debt and management efficiency concerns before making any investment decisions.