Capital Trust Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and Expensive Valuation

Capital Trust, a microcap finance company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 7.74%. Additionally, the company has shown poor long-term growth, with net sales declining at an annual rate of -16.99% and operating profit at -185.42%.
One of the main reasons for the 'Sell' rating is the company's expensive valuation, with a price to book value of 1.5 and an ROE of 5.3. This is significantly higher than its average historical valuations. Furthermore, while the stock has generated a return of 70.65% in the past year, its profits have fallen by -3101.4%.

On a positive note, Capital Trust has declared positive results for the last four consecutive quarters, with its highest PAT(Q) at Rs 2.02 crore, PBT LESS OI(Q) at Rs 2.56 crore, and EPS(Q) at Rs 1.25. However, the majority shareholders of the company are promoters, which may raise concerns for potential investors.

From a technical standpoint, the stock is currently in a mildly bullish range, with its MACD and KST technical factors also showing a bullish trend. Despite this, MarketsMOJO has downgraded the stock to 'Sell' due to its weak long-term fundamentals and expensive valuation.

In the past year, Capital Trust has outperformed the market (BSE 500) with a return of 70.65%, compared to the market's return of 31.64%. However, with the recent downgrade, investors may want to carefully consider their options before investing in this microcap finance company.