MarketsMOJO Downgrades PMC Fincorp to 'Sell' Due to Weak Fundamentals and Technical Indicators

PMC Fincorp, a microcap finance company, has recently been downgraded to a 'Sell' by MarketsMOJO on 2024-03-28. This decision was based on several factors, including weak long-term fundamental strength with an average Return on Equity (ROE) of 2.10% and poor long-term growth with an annual operating profit growth rate of -206.27%.
Technically, the stock is currently in a Mildly Bearish range, with a deteriorating trend since 28-Mar-24 and a -5% return since then. The RSI and Bollinger Band technical factors also indicate a bearish trend.

However, the company has declared positive results for the last 5 consecutive quarters, with a 20.09% growth in net sales and a highest PAT(Q) of Rs 2.94 cr. Its EPS(Q) is also at its highest at Rs 0.06.

Despite the recent downgrade, PMC Fincorp still has an attractive valuation with a ROE of 8.6 and a 1.3 Price to Book Value. It is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 38.18%, while its profits have risen by 201.5%. The PEG ratio of the company is also at a low 0.1.

It is worth noting that the majority shareholders of PMC Fincorp are non-institutional investors. This may have an impact on the stock's performance in the future. Overall, while the recent downgrade may raise concerns, it is important to consider all factors before making any investment decisions.