MarketsMOJO Downgrades Competent Automobiles Company to 'Sell' Rating Due to Poor Long-Term Growth and Declining Profits

Competent Automobiles Company, a microcap trading company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's poor long-term growth, with net sales growing at an annual rate of 12.23% and operating profit at 9.41% over the last 5 years. In addition, the company's recent financial results for September 2024 have shown a decline in profits, with a -22.1% decrease in PAT(Q) and the lowest operating profit to interest ratio at 2.48 times. Net sales for the quarter were also at their lowest at Rs 454.81 crore.
Technically, the stock is currently in a Mildly Bearish range, with a deteriorating trend since November 13, 2024, resulting in a -3.66% return. The Bollinger Band and KST technical factors also indicate a bearish trend for the stock.

However, the company does have some positive factors, such as a ROCE of 9.3 and a very attractive valuation with a 0.9 Enterprise value to Capital Employed. The stock is also currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 42.37%, but its profits have only risen by 3.6%, resulting in a PEG ratio of 2.4.

The majority shareholders of Competent Automobiles Company are the promoters, and the company has consistently outperformed the BSE 500 index in the last 3 annual periods. While the stock has shown strong returns in the past year, its long-term growth and recent financial results have led to a 'Sell' rating from MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.