MarketsMOJO Downgrades A.K.Capital Services to 'Sell' Due to Weak Fundamentals and Low Mutual Fund Interest

A.K.Capital Services, a microcap finance company, has recently been downgraded to a 'Sell' by MarketsMOJO on October 15, 2024. This decision was based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 10.08%. Additionally, the company has shown poor long-term growth, with net sales growing at an annual rate of only 3.95% and operating profit at 5.15%.
In the most recent quarter, the company's net sales were at its lowest at Rs 114.96 crore. Despite its size, domestic mutual funds hold a mere 0% stake in the company, which could indicate their discomfort with the company's price or business.

On a positive note, the stock is currently in a bullish range and its technical trend has improved from mildly bullish on October 15, 2024. Multiple technical factors, such as MACD, Bollinger Band, KST, and OBV, are also bullish for the stock.

With an ROE of 10, the stock is currently trading at a fair value with a price to book value of 0.8. This is in line with its average historical valuations. However, despite generating a return of 59.97% in the past year, the company's profits have only risen by 3.4%, resulting in a PEG ratio of 1.8.

In the long term, A.K.Capital Services has outperformed the BSE 500 index, generating market-beating returns. This trend has also been seen in the last 3 years, 1 year, and 3 months. Overall, while the stock may have potential for growth, current market conditions and the company's financial performance suggest a 'Sell' rating.