Hittco Tools Receives 'Sell' Rating from MarketsMOJO, Weak Long-Term Performance Indicated.

Hittco Tools, a microcap engineering company, has recently received a 'Sell' rating from MarketsMOJO on February 5th, 2024. This downgrade is based on several factors that indicate weak long-term performance for the company.
One of the main reasons for the 'Sell' rating is the company's weak long-term fundamental strength, with an average Return on Capital Employed (ROCE) of only 5.10%. This is coupled with poor long-term growth, as the company's net sales have only grown by an annual rate of -0.24% and operating profit at 17.92% over the last 5 years. Additionally, Hittco Tools has a high Debt to EBITDA ratio of 3.10 times, indicating a low ability to service debt.

In terms of recent performance, the company's results for September 2023 were flat, with the lowest EPS (Q) at Rs 0.03. This has also led to underperformance in the market, with the stock generating a return of only 3.69% in the last year, compared to the market's return of 31.75% (BSE 500).

On a technical level, the stock is currently in a Mildly Bullish range, with both the MACD and KST technical factors also showing a Bullish trend. However, with an ROCE of 8.2, the stock is currently trading at an attractive valuation with a 1.7 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations.

It is worth noting that while the stock has generated a return of 3.69% in the last year, its profits have fallen by -74.8%. This could be a cause for concern for investors.

Hittco Tools is primarily owned by non-institutional shareholders, which could also be a factor in the company's recent performance. Overall, the 'Sell' rating from MarketsMOJO suggests caution for investors considering Hittco Tools as a potential investment option.