MarketsMOJO Downgrades Howard Hotels to 'Sell' Due to Weak Fundamentals and Financial Performance

Howard Hotels, a microcap company in the hotel industry, has recently been downgraded to a 'Sell' by MarketsMOJO on August 12, 2024. This decision was based on several factors, including the company's weak long-term fundamental strength due to operating losses and poor growth in net sales over the past 5 years. Additionally, Howard Hotels has a weak ability to service its debt, with a poor EBIT to Interest ratio.
In terms of recent financial performance, the company's results for the quarter ending June 24 were flat, with the lowest PBDIT and PBT LESS OI in the past year. The EPS for the quarter was also at its lowest at Rs -0.85. However, there are some positive technical factors to note, as the stock is currently in a mildly bullish range and both the MACD and KST technical indicators are bullish.

From a valuation standpoint, Howard Hotels appears to be attractive with a ROCE of 9 and an enterprise value to capital employed ratio of 1.9. The stock is also trading at a discount compared to its historical valuations. However, it's important to note that while the stock has generated a return of 36.24% in the past year, its profits have actually fallen by -101.7%.

The majority shareholders of Howard Hotels are the promoters, and the company has consistently generated returns over the past 3 years. In fact, it has outperformed the BSE 500 index in each of the last 3 annual periods. While there may be some positive aspects to consider, the overall recommendation from MarketsMOJO is to sell Howard Hotels stock due to its weak long-term fundamentals and recent financial performance.