Hittco Tools Receives 'Strong Sell' Rating

Hittco Tools, a microcap engineering company, recently received a 'Strong Sell' rating from MarketsMOJO on 2023-06-30. The downgrade was based on several factors, including weak long-term fundamental strength, low growth, and high debt levels.
According to MarketsMOJO, Hittco Tools has shown an average Return on Capital Employed (ROCE) of only 5.10%. In addition, the company's net sales have grown at a negative annual rate of -0.24% and operating profit has only increased by 17.92% over the last 5 years. This indicates a poor long-term growth trend for the company.

Furthermore, Hittco Tools has a high Debt to EBITDA ratio of 3.10 times, indicating a low ability to service debt. In the latest quarter, the company reported a lowest EPS of Rs 0.03.

Technically, the stock is currently in a Mildly Bearish range, with factors such as MACD, Bollinger Band, KST, and DOW all showing a Mildly Bearish trend.

In the past year, Hittco Tools has significantly underperformed the market, generating negative returns of -26.42% compared to the market's 16.72% returns.

On the positive side, the company has an attractive valuation with an ROCE of 8.2 and a 1.5 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations. However, despite these factors, its profits have fallen by -74.8% over the past year.

It is important to note that Hittco Tools is majority-owned by non-institutional shareholders. This means that the company may be more susceptible to market volatility and fluctuations.

In conclusion, while Hittco Tools may seem attractive due to its low valuation, the company's weak long-term fundamentals, high debt levels, and underperformance in the market make it a 'Strong Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.