Capital India Finance Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals and Expensive Valuation

Capital India Finance, a smallcap finance company, has recently been downgraded to a 'Sell' by MarketsMOJO on November 21, 2024. This decision was based on weak long-term fundamental strength, with an average Return on Equity (ROE) of 1.26% and poor long-term growth, as the operating profit has declined by an annual rate of -30.58%. Additionally, the stock has a very expensive valuation with a price to book value of 2.2 and is trading at a premium compared to its historical valuations.
Despite generating a return of 41.84% in the past year, the company's profits have only risen by 114.5%, resulting in a high PEG ratio of 4.7. Furthermore, domestic mutual funds hold a small stake of only 0% in the company, which could indicate their discomfort with the stock's price or business.

On the other hand, Capital India Finance has shown strong operating cash flow and operating profit to net sales in the past year. The stock is also technically in a mildly bullish range, with its MACD and KST technical factors being bullish as well.

In terms of market performance, the stock has outperformed the BSE 500 in the last 3 years, 1 year, and 3 months, making it a market-beating performer in both the long and near term. However, considering the current factors, MarketsMOJO has downgraded the stock to a 'Sell' and investors should carefully evaluate their investment decisions.