Keystone Realtors Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and High Debt

Mar 01 2024 06:25 PM IST
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Keystone Realtors, a midcap construction and real estate company, has received a 'Sell' rating from MarketsMojo due to weak long-term fundamentals and a high debt to EBITDA ratio. Despite recent positive results and institutional investor interest, the company's expensive valuation and decline in profits should be considered before investing.
Keystone Realtors, a midcap company in the construction and real estate industry, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on several factors, including weak long-term fundamental strength with a -5.95% CAGR growth in operating profits over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 6.63 times, indicating a low ability to service debt.

Furthermore, Keystone Realtors has a low profitability per unit of shareholders' funds, with a return on equity (avg) of 9.94%. This is reflected in its expensive valuation, with a price to book value of 4.4 and a stock trading at a premium compared to its historical valuations.

Despite positive results in the last 3 consecutive quarters, with a significant growth in profits and net sales, the stock has seen a decline in profits by -41% in the past year. Technically, the stock is in a mildly bullish range, with multiple factors such as MACD, KST, DOW, and OBV indicating a bullish trend.

Institutional investors have also shown an increasing interest in Keystone Realtors, with a 1.13% increase in their stake in the company over the previous quarter. This is a positive sign, as institutional investors have better resources and capabilities to analyze a company's fundamentals.

Despite the market-beating performance of 49.04% in the last year, it is important to consider the company's weak fundamentals and high debt before making any investment decisions. MarketsMOJO's 'Sell' rating serves as a cautionary reminder for investors to carefully evaluate the company's financial health before investing in Keystone Realtors.
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