Machino Plastics Receives 'Hold' Rating from MarketsMOJO Based on Technical Factors and Attractive Valuation

Machino Plastics, a microcap company in the auto ancillary industry, has recently received a 'Hold' rating from MarketsMOJO on January 29, 2024. This upgrade is based on various technical factors, such as the stock being in a bullish range and improvements in the technical trend.
One of the key reasons for the 'Hold' rating is the company's attractive valuation, with a ROCE of 4.9 and an enterprise value to capital employed ratio of 1.6. Additionally, the stock is currently trading at a discount compared to its historical valuations. Over the past year, the stock has generated a return of 95.21%, while its profits have increased by 49.6%. The PEG ratio of the company is also at a reasonable level of 1.4.

The majority shareholders of Machino Plastics are the promoters, which can be seen as a positive sign for investors. The company has also shown strong market performance in the long term, outperforming the BSE 500 index in the last 3 years, 1 year, and 3 months.

However, there are some concerns regarding the company's long-term fundamental strength. The operating profits have shown a negative CAGR growth of -0.98% over the last 5 years, indicating weak performance. The company also has a high debt to EBITDA ratio of 4.71 times, which may affect its ability to service debt. The return on equity (avg) is also low at 4.34%, indicating low profitability per unit of shareholders' funds.

In the latest financial results for September 2023, the company's performance was flat. Overall, while Machino Plastics has shown promising market performance and attractive valuations, there are some concerns regarding its long-term fundamental strength. Investors may want to hold onto their positions for now and keep an eye on the company's future performance.