Vivid Global Industries Receives 'Hold' Rating After Positive Q2 Results

Vivid Global Industries, a microcap company in the chemicals industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in June 2024, with a higher profit after tax of Rs 0.15 crore and the highest net sales of Rs 13.19 crore in the quarter.
Technically, the stock is currently in a bullish range and the technical trend has improved from mildly bullish on 28th August 2024. Multiple factors such as MACD, Bollinger Band, and KST are also indicating a bullish trend for the stock.

However, the majority shareholders of the company are non-institutional investors, which may raise concerns for some investors. Additionally, the company's long-term fundamental strength is weak with a negative CAGR growth of -158.54% in operating profits over the last 5 years. Furthermore, the company's ability to service its debt is also weak with a poor EBIT to Interest ratio of 1.43.

The stock is currently trading at a very expensive valuation with a price to book value of 1.3. However, it is still at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 9.80%, while its profits have risen by 88%. This gives the company a PEG ratio of 0.1, indicating a potential undervaluation.

In the last year, the stock has underperformed the market, with a return of 9.80% compared to the market's return of 39.22%. This may be a cause for concern for some investors.

Overall, while Vivid Global Industries has shown positive results in the recent quarter and is currently in a bullish trend, its weak long-term fundamental strength and underperformance in the market may make it a hold for now. Investors should carefully consider all factors before making any investment decisions.