MarketsMOJO Downgrades Balmer Lawrie & Company to 'Sell' Due to Poor Growth and Expensive Valuation

Balmer Lawrie & Company, a smallcap logistics company, has recently been downgraded to a 'Sell' by MarketsMOJO on October 29, 2024. This decision was based on several factors, including poor long-term growth, technical trends, and expensive valuation.
According to MarketsMOJO, Balmer Lawrie & Company has shown a slow growth rate of only 6.45% in operating profit over the last 5 years. Additionally, the stock is currently in a Mildly Bearish range, with a deteriorating technical trend since October 29, 2024, resulting in a -1.42% return. The MACD and KST technical factors are also Bearish, indicating a potential downward trend for the stock.

The company's ROE (Return on Equity) is at 14.4, which is considered expensive with a price to book value of 2.1. This means that the stock is trading at a premium compared to its average historical valuations. While the stock has generated a high return of 64.18% in the past year, its profits have only risen by 54.9%, resulting in a PEG ratio of 0.3. Additionally, the company has a high dividend yield of 3.8 at the current price.

One interesting factor to note is that despite being a smallcap company, domestic mutual funds hold only 0.08% of Balmer Lawrie & Company. This could signify that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth research on companies.

On a positive note, the company has a low Debt to Equity ratio of 0 times, indicating a strong financial position. It has also declared positive results for the last 5 consecutive quarters, with a growth rate of 35.02% in PAT (Profit After Tax) and a highest ROCE (Return on Capital Employed) of 15.33%. The company also has a high amount of cash and cash equivalents at Rs 524.78 crore.

In terms of market performance, Balmer Lawrie & Company has outperformed the market (BSE 500) with a return of 64.18% in the last year, compared to the market's return of 35.31%. However, with the recent downgrade by MarketsMOJO, investors may want to carefully consider their options before investing in this stock.