Aarti Surfactants Receives 'Hold' Rating from MarketsMOJO, Technical Trend Improves to Bullish

Aarti Surfactants, a microcap company in the chemicals industry, has recently received a 'Hold' rating from MarketsMOJO on July 8, 2024. This upgrade is based on the stock's technical trend, which has improved from Mildly Bullish to Bullish. The company's MACD, Bollinger Band, and KST indicators are all showing bullish signs.
In terms of valuation, Aarti Surfactants has an attractive ROCE of 13.6 and a low enterprise value to capital employed ratio of 2.3. Additionally, the stock is currently trading at a discount compared to its historical valuations. Over the past year, the stock has generated a return of 12.38%, while its profits have increased by 67.9%. The company's PEG ratio is also at a favorable level of 0.6.

However, Aarti Surfactants has weak long-term fundamental strength, with a negative CAGR growth in operating profits of -19.43% over the last 5 years. The company also has a high debt to EBITDA ratio of 3.36, indicating a low ability to service debt.

In the latest quarter, the company's profits have fallen by -12.9%, with the lowest EPS of Rs 5.49. It is worth noting that despite its size, domestic mutual funds hold only 0% of the company, which could suggest that they are not comfortable with the current price or the business.

In the last year, Aarti Surfactants has underperformed the market, generating a return of 12.38% compared to the BSE 500 index's return of 37.98%. While the stock may have potential for growth, it is important to consider the company's weak long-term fundamentals and low interest from domestic mutual funds. Investors may want to hold off on investing in Aarti Surfactants until there is more positive news and improvement in its financials.