Swiss Military Consumer Goods Receives 'Hold' Rating from MarketsMOJO Due to High Valuation and Lack of Mutual Fund Interest

Swiss Military Consumer Goods, a microcap company in the lifestyle industry, has recently received a 'Hold' rating from MarketsMOJO on June 6, 2024. This downgrade is due to the company's low Debt to Equity ratio, which is at an average of 0.02 times.
However, the company has shown healthy long-term growth with an annual growth rate of 104.72% in Net Sales and 57.98% in Operating profit. In fact, in the last quarter of March 2024, the company declared very positive results with a growth in Net Sales of 9.01%. This positive trend has been consistent for the past 11 quarters. Additionally, the company's ROCE (HY) is at its highest at 15.12%, while its NET SALES (Q) and PBDIT (Q) are also at their highest at Rs 54.09 cr and Rs 2.89 cr respectively.

Technically, the stock is currently in a mildly bullish range and has shown improvement since May 30, 2024, generating a return of -3.65%. The MACD and KST technical factors also indicate a bullish trend.

In terms of market performance, the stock has outperformed the market (BSE 500) with a return of 89.28% in the last year, compared to the market's return of 33.87%.

However, with a ROE of 11.6, the stock is currently trading at a very expensive valuation with a price to book value of 7.2. This is higher than its average historical valuations. Additionally, while the stock has shown a strong return in the past year, its profits have only risen by 58.7%, resulting in a PEG ratio of 1.1.

It is also worth noting that despite being a microcap company, domestic mutual funds hold only 0% of the company. This could indicate that they are either not comfortable with the current price or have not conducted in-depth research on the company.

In conclusion, while Swiss Military Consumer Goods has shown strong growth and market-beating performance, its current valuation and lack of interest from domestic mutual funds may warrant a 'Hold' rating from MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.