Freshtrop Fruits Receives 'Sell' Rating from MarketsMOJO, Downgraded Due to Poor Long-Term Growth and Negative Results

Freshtrop Fruits, a microcap company in the FMCG industry, has recently received a 'Sell' rating from MarketsMOJO on February 14, 2024. This downgrade is based on the company's poor long-term growth, with an annual operating profit growth rate of -2.80% over the last 5 years.
In addition, the company has reported negative results in December 2023, with a significant decrease in net sales and profits. The net sales have fallen by -59.2%, while the profits have fallen by -1083.8%. The PBDIT (Profit Before Depreciation, Interest, and Taxes) has also reached its lowest at Rs -4.05 crore.

One of the few positive factors for Freshtrop Fruits is its strong ability to service debt, with a low Debt to EBITDA ratio of 1.42 times. However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The stock's technical trend has also deteriorated since February 14, 2024, and has generated -2% returns since then.

Despite the recent downgrade, Freshtrop Fruits still has a very attractive valuation with a ROE (Return on Equity) of 16.1 and a price to book value of 1.7. The stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 44.09%, while its profits have risen by 202.8%. The PEG (Price/Earnings to Growth) ratio of the company is also at a low 0.1.

It is worth noting that the majority shareholders of Freshtrop Fruits are the promoters themselves. This could potentially raise concerns about the company's corporate governance.

Despite its market-beating performance in the last year, with a return of 44.09%, Freshtrop Fruits' recent downgrade to 'Sell' by MarketsMOJO raises concerns about its future growth potential. Investors should carefully consider these factors before making any investment decisions regarding this microcap FMCG company.