Arihants Securities Downgraded to 'Sell' by MarketsMOJO, Weak Fundamentals and Fair Valuation Raise Concerns

Arihants Securities, a microcap finance company, has recently been downgraded to a 'Sell' by MarketsMOJO on September 3rd, 2024. This decision was based on weak long-term fundamental strength, with an average Return on Equity (ROE) of 4.77% and poor long-term growth, as operating profit has only grown by 8.16% annually.
In addition, the company's results for June 2024 were flat, further contributing to the downgrade. However, there are some bullish factors to consider, such as the stock being in a bullish range and technical trends showing improvement since July 1st, 2024, with a 17.12% return since then. Other bullish indicators include MACD, Bollinger Band, and KST.

Despite these positive indicators, the stock has a fair valuation with a price to book value of 0.3 and is currently trading at a premium compared to its historical valuations. Furthermore, while the stock has generated a return of 81.41% in the past year, its profits have only risen by 46%, resulting in a PEG ratio of 0.2.

The majority shareholders of Arihants Securities are non-institutional investors, and the company has shown market-beating performance in both the long-term and near-term. In addition to its 81.41% return in the past year, the stock has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months.

Overall, while there are some bullish factors to consider, the recent downgrade by MarketsMOJO suggests that investors may want to approach Arihants Securities with caution. With weak long-term fundamentals and a fair valuation, it may be wise to wait for further improvements before considering investing in this microcap finance company.