Ceejay Finance Receives 'Hold' Rating After Positive Q3 Results, But Long-Term Strength Remains Weak

Ceejay Finance, a microcap finance company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in September 2024, with a 20.08% growth in net sales and the highest PBDIT and PBT LESS OI in the quarter.
The stock is currently in a bullish range, with technical trends showing improvement from mildly bullish on November 27, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, contribute to the bullish sentiment.

The majority shareholders of Ceejay Finance are its promoters, indicating their confidence in the company's performance. The stock has consistently outperformed BSE 500 in the last three annual periods, with a return of 51.96% in the last year alone.

However, the company's long-term fundamental strength is weak, with an average ROE of 10.00%. Net sales have only grown at an annual rate of 7.58%, and operating profit at 2.62%. Additionally, with an ROE of 10.4, the stock is currently trading at an expensive valuation with a price to book value of 1.3. This is higher than its average historical valuations.

Despite the stock's impressive return of 51.96% in the last year, its profits have only risen by 5.4%, resulting in a high PEG ratio of 3.8. This indicates that the stock may be overvalued and investors should exercise caution before investing in Ceejay Finance.