MarketsMOJO Downgrades Cheviot Company to 'Sell' Due to Poor Growth and Negative Results

Cheviot Company, a microcap textile company, has recently been downgraded to a 'Sell' by MarketsMOJO on October 3rd, 2024. This decision was based on several factors, including poor long-term growth and negative results in the most recent quarter.
Over the last 5 years, Cheviot Company has only seen a 1.29% annual growth in net sales and a 3.81% growth in operating profit. In addition, the company's operating cash flow and cash and cash equivalents were at their lowest in the most recent quarter, at Rs 35.92 crore and Rs 2.95 crore respectively. These results have led to the company underperforming in the market, with a return of only 20.97% in the last year compared to the market's 36.98% return.

Other factors that may have contributed to the downgrade include the company's low debt to equity ratio and its stock being in a mildly bullish range. However, the company's ROE of 12.6 indicates a fair valuation with a price to book value of 1.3. It is worth noting that the stock is currently trading at a premium compared to its historical valuations.

Despite a 28.8% increase in profits over the past year, the PEG ratio of the company is 0.4, suggesting that the stock may be overvalued. With these factors in mind, MarketsMOJO has made the decision to downgrade Cheviot Company to a 'Sell'. Investors should carefully consider these factors before making any decisions regarding this stock.