Aplab Receives 'Hold' Rating from MarketsMOJO Based on Technical Factors and Attractive Valuation

Aplab, a microcap company in the electronics components industry, has recently received a 'Hold' rating from MarketsMOJO on May 21, 2024. This upgrade is based on various technical factors, including a bullish trend and positive indicators such as MACD, KST, and DOW.

One of the key reasons for this upgrade is the company's attractive valuation, with a ROCE of 29.1 and an enterprise value to capital employed ratio of 3.8. Additionally, the stock is currently trading at a discount compared to its historical valuations. In the past year, Aplab has generated a return of 205.80%, while its profits have increased by 565%. This has resulted in a PEG ratio of 0, indicating a potentially undervalued stock.

The majority shareholders of Aplab are the promoters, which can be seen as a positive sign for investors. The company has also shown strong performance in the long term, outperforming the BSE 500 index in the last 3 years, 1 year, and 3 months.

However, there are some concerns regarding the company's long-term fundamental strength. Aplab has an average ROCE of 0%, indicating poor returns on capital employed. Its net sales have also declined by an annual rate of -3.17% and operating profit has remained stagnant over the last 5 years. Additionally, the company has a high debt to equity ratio of 0 times, which may be a cause for concern for some investors.

In the latest quarter, Aplab's results were flat, with PBDIT(Q) at its lowest at Rs 0.50 crore and operating profit to net sales (Q) at its lowest at 4.19%. These factors may have contributed to the 'Hold' rating from MarketsMOJO.

Overall, while Aplab has shown strong performance in the short term and has attractive valuations, its long-term fundamentals and high debt may be a cause for concern. Investors are advised to carefully consider these factors before making any investment decisions.