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 on September 30, 2024. 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 a decline in net sales by an annual rate of -12.57% 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 1.9 and an ROE of 5.3. However, the stock is currently trading at a discount compared to its average historical valuations. Despite generating a return of 43.21% in the past year, the company's profits have only risen by 104.9%, resulting in a low PEG ratio of 0.3.

In terms of other factors, 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. Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, KST, and OBV indicating a bullish trend.

It is worth noting that the majority shareholders of Capital Trust are the promoters themselves. While this may indicate confidence in the company, it is important to consider the overall performance and financial health of the company before making any investment decisions.

In conclusion, MarketsMOJO's 'Sell' rating on Capital Trust is based on the company's weak long-term fundamentals and expensive valuation. Investors should carefully evaluate all factors and do their own research before making any investment decisions.