Machino Plastics Downgraded to 'Sell' by MarketsMOJO

Machino Plastics, a microcap company in the auto ancillary industry, has recently been downgraded to a 'Sell' by MarketsMOJO on December 18, 2023. This decision was based on the company's weak long-term fundamental strength, with a -0.98% CAGR growth in operating profits over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 4.71 times, indicating a low ability to service debt. The return on equity (avg) of 4.34% also signifies low profitability per unit of shareholders' funds.
In terms of recent performance, Machino Plastics has reported flat results in September 2023. However, the stock is currently in a bullish range and has shown improvement in technical trends since December 11, 2023, generating 29.72% returns since then. Multiple factors, such as MACD, Bollinger Band, KST, and OBV, are also bullish for the stock.

With a ROCE of 4.9, the stock is currently fairly valued with a 1.7 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations. Despite generating a return of 104.14% in the past year, the company's profits have only risen by 49.6%, resulting in a PEG ratio of 1.6.

The majority shareholders of Machino Plastics are the promoters, indicating their confidence in the company's long-term performance. In fact, the stock has not only outperformed the BSE 500 in the last year, but also in the last 3 years, 1 year, and 3 months, showcasing its market-beating performance in both the long and near term.

Overall, while Machino Plastics may have some positive technical indicators, its weak fundamental strength and high debt levels make it a risky investment. Investors should carefully consider these factors before making any decisions regarding this microcap company in the auto ancillary industry.