United Van Der Horst Receives 'Sell' Rating Due to Weak Fundamentals and High Debt

United Van Der Horst, a microcap engineering company, has recently received a 'Sell' rating from MarketsMOJO on April 8, 2024. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Capital Employed (ROCE) of 2.77%. Additionally, the company has a high Debt to EBITDA ratio of 5.89 times, indicating a low ability to service debt.
The stock is also considered to be very expensive, with a ROCE of 3.8 and an enterprise value to capital employed ratio of 3.1. However, it is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 223.98%, while its profits have only risen by 60.5%. This gives the company a PEG ratio of 1.4.

On a positive note, United Van Der Horst has declared positive results for the last 7 consecutive quarters. Its net sales have grown at a rate of 51.26%, with the highest PBDIT and PBT LESS OI in the last quarter at Rs 2.28 cr and Rs 1.02 cr respectively.

From a technical standpoint, the stock is currently in a mildly bullish range, with both its MACD and KST technical factors showing a bullish trend. Furthermore, there has been a rise in promoter confidence, with promoters increasing their stake in the company by 1.62% in the previous quarter and currently holding 72.06% of the company. This is a positive sign of their confidence in the future of the business.

In terms of performance, United Van Der Horst has outperformed the BSE 500 in the long term as well as the near term. Along with generating a return of 223.98% in the last year, the stock has also outperformed the BSE 500 in the last 3 years, 1 year, and 3 months. However, considering the recent downgrade by MarketsMOJO and the company's weak fundamental strength, investors may want to approach this stock with caution.