Vertex Securities Receives Upgraded Stock Call from MarketsMOJO, Showing Strong Performance in First Half of 2024

Vertex Securities, a microcap company in the finance/NBFC industry, has recently received an upgraded stock call from MarketsMOJO. The stock has been upgraded to 'Hold' on 29th August 2024.
The decision to upgrade the stock to 'Hold' is based on positive results in the first half of 2024. The company's net sales have grown by 85.81% to reach Rs 5.37 crore, while its profits after tax have also increased to Rs 0.78 crore. Additionally, the stock is currently in a bullish range and the technical trend has improved from mildly bullish to bullish on 29th August 2024. This is supported by factors such as MACD, Bollinger Band, and KST.

The majority shareholders of Vertex Securities are the promoters, indicating their confidence in the company's performance. In the long term, the stock has outperformed the BSE 500 index, generating a return of 97.41% in the last year. This showcases the company's market-beating performance in both the long term and near term.

However, the company's long term fundamental strength is weak with an average return on equity (ROE) of 2.52%. The operating profit has also shown poor growth, declining at an annual rate of -14.73%. Additionally, with a ROE of 4.9, the stock is currently trading at a very expensive valuation with a price to book value of 4.7. However, it is currently trading at a discount compared to its average historical valuations.

Despite the stock's impressive return of 97.41% in the last year, its profits have only risen by 174%. This results in a PEG ratio of 0.2, indicating that the stock may be overvalued. Overall, while the stock has shown strong performance in the past year, investors should carefully consider the company's weak long term fundamentals before making any investment decisions.