CHD Chemicals Receives 'Sell' Rating Due to Weak Financials and High Debt Burden

CHD Chemicals, a microcap trading company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, with a -17.20% CAGR growth in operating profits over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 7.29 times, indicating a low ability to service debt. Furthermore, the company's return on equity (avg) of 2.40% reflects low profitability per unit of shareholders' funds.
In December 2023, CHD Chemicals reported flat results with a decline of -21.46% in net sales. On a positive note, the stock is currently in a mildly bullish range and its RSI and Bollinger Band technical factors are also bullish. However, with a ROCE of 1.9, the stock is considered to have a very attractive valuation with a 0.7 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations.

Despite generating a return of 34.44% in the past year, the company's profits have only risen by 49%, resulting in a PEG ratio of 0. This indicates that the stock may be overvalued. It is also worth noting that the majority of CHD Chemicals' shareholders are non-institutional investors.

Overall, the recent downgrade to 'Sell' by MarketsMOJO highlights the company's weak financial performance and high debt burden. Investors should carefully consider these factors before making any investment decisions regarding CHD Chemicals.