Chartered Logistics Receives 'Sell' Rating Due to Weak Fundamentals and High Debt Levels

Chartered Logistics, a microcap logistics company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, with a -9.36% CAGR growth in operating profits over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 9.61 times, indicating a low ability to service debt. The return on equity for the company has also been low at 1.83%, showing a lack of profitability per unit of shareholders' funds.
While the company did show positive results in June 2024, with a higher PAT of Rs 2.27 crore and the highest net sales and PBDIT in the quarter, the stock is currently in a mildly bullish range. The technical factors of MACD and KST are also bullish. However, with a ROCE of 2.5, the stock is fairly valued with an enterprise value to capital employed ratio of 1.9. It is also trading at a premium compared to its average historical valuations.

Despite the stock generating a return of 101.99% in the last year, its profits have only risen by 230%, resulting in a PEG ratio of 0. This indicates that the stock may be overvalued. The majority shareholders of Chartered Logistics are non-institutional investors.

Overall, while the stock has shown market-beating performance in the past year, the recent downgrade to 'Sell' by MarketsMOJO suggests caution for potential investors. The company's weak long-term fundamentals and high debt levels may pose a risk to its future growth and profitability.