CHD Chemicals Receives 'Hold' Rating from MarketsMOJO Based on Technical Indicators and Attractive Valuation

CHD Chemicals, a microcap trading company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on various technical indicators that show a bullish trend for the stock. Since January 2, 2024, the stock has generated a return of 24.56%, indicating a positive trend.
One of the key factors contributing to this upgrade is the company's attractive valuation with a ROCE of 1.9 and an enterprise value to capital employed ratio of 0.8. This means that the stock is currently trading at a discount compared to its historical valuations. Additionally, the company's profits have risen by 5% in the past year, while the stock has generated a return of 18.33%. This results in a low PEG ratio of 0.4, indicating a potential for future growth.

However, there are some concerns regarding the company's long-term fundamental strength. Over the last 5 years, the company has seen a -17.20% CAGR growth in operating profits, indicating a weak performance. The company also has a high debt to EBITDA ratio of 7.29 times, which may affect its ability to service debt. Furthermore, the company has a low return on equity of 2.40%, indicating low profitability per unit of shareholders' funds.

In terms of ownership, the majority shareholders of CHD Chemicals are non-institutional investors. The company's financial results for September 2023 were flat, with a 28.94% decline in net sales compared to the previous year.

Overall, while CHD Chemicals has shown a positive trend in the short term, there are some concerns regarding its long-term fundamental strength. Investors may want to hold onto their positions for now and monitor the company's performance closely.