MarketsMOJO Downgrades Asian Hotels (East) Stock to 'Sell' Amid Bearish Trend

Asian Hotels (East) is a microcap company in the hotel industry. Recently, MarketsMOJO downgraded its stock call to 'Sell' on July 18, 2024. This is due to the stock being in a bearish range and its technical trend deteriorating from mildly bearish to -6.78% returns since then. The MACD and Bollinger Band technical factors also indicate a bearish trend.
In the past year, the stock has underperformed the market with a return of only 0.91%, compared to the market's return of 36.87%. However, the company has a low debt to equity ratio and has shown healthy long-term growth with an annual rate of 173.31% in operating profit.

Furthermore, the company has recently declared positive results in March 2024 after two consecutive negative quarters. Its net sales and PBDIT have reached their highest at Rs 33.61 crore and Rs 13.22 crore respectively. The operating profit to net sales ratio is also at its highest at 39.33%.

With a ROCE of 4.8, the company has a very attractive valuation with an enterprise value to capital employed ratio of 1. Additionally, the stock is currently trading at a discount compared to its average historical valuations. Despite the low stock returns, the company's profits have risen by 63.3% in the past year, resulting in a PEG ratio of 0.1.

It is worth noting that the majority shareholders of Asian Hotels (East) are the promoters themselves. This may indicate their confidence in the company's future growth and potential. However, based on the current technical and market trends, MarketsMOJO has downgraded the stock call to 'Sell'. Investors are advised to carefully consider these factors before making any investment decisions.