Forbes & Company Downgraded to 'Sell' by MarketsMOJO Due to High Debt and Poor Growth

Forbes & Company, a microcap engineering company, has recently been downgraded to a 'Sell' by MarketsMOJO on October 25, 2024. This decision was based on several factors, including the company's high debt to EBITDA ratio of 5.61 times, indicating a low ability to service debt. Additionally, the company has shown poor long-term growth with a decline in net sales by an annual rate of -41.10% and operating profit at -26.03% over the last 5 years.
In the most recent quarter, Forbes & Company reported negative results with a -20.6% decrease in net sales, a -46.2% decrease in PBT less OI, and a -5.8% decrease in PAT. This has led to a high ROE of 16 and a very expensive valuation with a 6 price to book value. However, the stock is currently trading at a discount compared to its average historical valuations.

Despite generating a return of 155.06% in the past year, the company's profits have fallen by -42.1%, resulting in a PEG ratio of 1.1. Additionally, 98.25% of promoter shares are pledged, which can put additional downward pressure on the stock prices in falling markets.

On a positive note, the stock is currently in a mildly bullish range and has shown multiple bullish indicators such as MACD, KST, and OBV. Forbes & Company has also outperformed the BSE 500 in the long term, with a market-beating performance in the last 3 years, 1 year, and 3 months.

Overall, the recent downgrade to 'Sell' by MarketsMOJO highlights the challenges faced by Forbes & Company in terms of high debt and poor long-term growth. Investors should carefully consider these factors before making any investment decisions.