MarketsMOJO Downgrades Perfectpac Due to Weak Long-Term Fundamentals

Perfectpac, a microcap company in the packaging industry, has recently received a 'Sell' rating from MarketsMOJO on February 12, 2024. This downgrade is based on weak long-term fundamental strength, with a -1.41% CAGR growth in operating profits over the last 5 years. Additionally, the company has a low profitability per unit of shareholders' funds, with a return on equity of 7.24%.
In December 2023, Perfectpac reported flat results and its EPS(Q) was at its lowest at Rs 0.74. However, the stock is currently in a bullish range and has shown improvement in its technical trend since January 2, 2024, generating a return of 10.98%. Multiple factors, such as MACD, Bollinger Band, and KST, are also indicating a bullish trend for the stock.

Despite a fair valuation with a price to book value of 2.1 and trading at a discount compared to its historical valuations, Perfectpac's profits have risen by 139.6% in the past year, while the stock has generated a return of 79.51%. This has resulted in a low PEG ratio of 0.1 for the company.

The majority shareholders of Perfectpac are its promoters, and the company has consistently outperformed BSE 500 in the last 3 annual periods, with a return of 79.51%. However, considering the recent downgrade by MarketsMOJO and the company's weak long-term fundamentals, it may be wise for investors to exercise caution before investing in Perfectpac.