J J Finance Corporation Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and Low Cash Flow

J J Finance Corporation, a microcap finance company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 2.71%. In addition, the company's operating cash flow has been consistently low, with the lowest being at Rs -0.44 Cr in September 2024.
Despite the recent flat results, the stock is technically in a bullish range and has shown improvement since November 6, 2024, generating a return of 15.71%. Multiple technical indicators, such as MACD, Bollinger Band, and KST, also suggest a bullish trend for the stock.

However, with an ROE of 6.9, the stock is currently fairly valued with a price to book value of 1.3. It is also trading at a discount compared to its historical valuations. Although the stock has generated a high return of 134.43% in the past year, its profits have only risen by 67%, resulting in a PEG ratio of 0.

The majority shareholders of J J Finance Corporation are its promoters, indicating their confidence in the company's performance. In fact, the stock has not only outperformed the BSE 500 index in the last year, but also in the last 3 years, 1 year, and 3 months, showcasing its market-beating performance in the long term as well as the near term.

Overall, while J J Finance Corporation may have shown a strong return in the past year, its weak fundamental strength and low operating cash flow suggest a 'Sell' rating from MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.