National Plastic Industries Receives 'Sell' Rating Due to Weak Long-Term Performance.

National Plastic Industries, a microcap company in the plastic products industry, has recently received a 'Sell' rating from MarketsMOJO. 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. National Plastic Industries has an average Return on Capital Employed (ROCE) of only 7.11%, which is below the industry average. Additionally, the company has shown poor long-term growth with a -1.01% annual growth rate in Net Sales and only 4.92% in Operating profit over the last 5 years.

Another concerning factor is the company's high Debt to EBITDA ratio of 5.42 times, indicating a low ability to service debt. This is further supported by the recent flat results in December 2023, with a significant decrease of 19.51% in Net Sales.

On the technical side, the stock is currently in a Mildly Bullish range, with multiple factors such as MACD, Bollinger Band, and KST showing a bullish trend. However, these factors do not outweigh the weak fundamental performance of the company.

Despite the current discount in its valuation compared to historical averages, National Plastic Industries still has a ROCE of 12.3, making it a Very Attractive investment opportunity with a 1.4 Enterprise value to Capital Employed. However, the stock has only generated a return of 79.69% in the past year, while its profits have only increased by 31.8%. This results in a PEG ratio of 0.5, indicating that the stock may be overvalued.

It is also worth noting that the majority shareholders of National Plastic Industries are the promoters, which may raise concerns about potential conflicts of interest.

In conclusion, while National Plastic Industries has shown market-beating performance in the long term, its recent downgrade to 'Sell' by MarketsMOJO and weak fundamental performance suggest caution for potential investors.