Uniroyal Industries Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals and High Debt.

Uniroyal Industries, a microcap textile company, has recently been downgraded to a 'Sell' by MarketsMOJO on 2024-03-14. This decision was based on several factors, including weak long-term fundamental strength with a -34.43% CAGR growth in operating profits over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 4.66 times, indicating a low ability to service debt.
Furthermore, Uniroyal Industries has a low profitability per unit of shareholders' funds, with a return on equity (avg) of 4.17%. Its valuation is also considered expensive with a 1 enterprise value to capital employed. However, the stock is currently trading at a discount compared to its average historical valuations.

In the past year, the stock has generated a return of 79.69%, while its profits have risen by 47%. This has resulted in a PEG ratio of 0.1, indicating a potential overvaluation. Other factors to consider include the company's highest PBDIT(Q) of Rs 2.54 crore, highest operating profit to net sales(Q) of 10.62%, and highest PBT less OI(Q) of Rs 1.50 crore.

Technically, the stock is in a mildly bullish range, with its MACD and KST technical factors also showing a bullish trend. The majority shareholders of Uniroyal Industries are its promoters, indicating their confidence in the company's performance.

Despite its recent downgrade, Uniroyal Industries has a track record of market-beating performance in the long term as well as the near term. In addition to generating a 79.69% return in the last year, the stock has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months. Investors should carefully consider these factors before making any decisions regarding Uniroyal Industries' stock.