Econo Trade India Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals

Econo Trade India, a microcap company in the finance/NBFC industry, has recently been downgraded to a 'Sell' by MarketsMOJO on September 3, 2024. This decision was based on weak long-term fundamental strength, with an average Return on Equity (ROE) of 3.03% and poor long-term growth as Net Sales has only grown by an annual rate of 31.69%.
In addition, the company's results for the quarter ending June 24 were flat, with PBT LESS OI(Q) at its lowest at Rs 0.54 cr and EPS(Q) at its lowest at Rs 0.22. This underperformance has also been reflected in the stock's performance in the last year, generating a return of only 11.69% compared to the market (BSE 500) returns of 38.66%.

Technically, the stock is currently in a Mildly Bullish range, with its MACD and KST technical factors also showing a Bullish trend. However, with an ROE of 5.7, the stock does have a Very Attractive valuation with a 0.4 Price to Book Value. It is also currently trading at a discount compared to its average historical valuations.

Despite the stock's 11.69% return in the past year, its profits have only risen by 9.1%, resulting in a PEG ratio of 0.8. This indicates that the stock may be overvalued and not a good investment option at this time.

Investors should take note of these factors and carefully consider their options before making any decisions regarding Econo Trade India's stock. MarketsMOJO's downgrade to 'Sell' serves as a cautionary warning for potential investors.