MarketsMOJO Downgrades Rane Brake Lining to 'Sell' Due to Poor Growth and Underperformance

Rane Brake Lining, a microcap company in the auto ancillary industry, has recently been downgraded to a 'Sell' by MarketsMOJO on March 6, 2024. This decision was based on the company's poor long-term growth, as its operating profit has declined by an annual rate of -6.94% over the last 5 years. Additionally, the company's results for December 2023 were flat.
Technically, the stock is currently in a Mildly Bearish range, with the technical trend deteriorating from Mildly Bullish on March 6, 2024. Since then, the stock has generated -4.12% returns. The MACD and Bollinger Band technical factors also indicate a Bearish trend.

Despite being a microcap company, Rane Brake Lining has not attracted much interest from domestic mutual funds, with only 0% of the company's shares being held by them. This could be due to their lack of comfort with the company's current price or its business.

In the last 1 year, the stock has underperformed the market, generating a return of only 6.72% compared to the market's (BSE 500) returns of 36.15%.

Other factors to consider include the company's low Debt to Equity ratio (avg) of 0 times and an ROE of 14.4, making it an attractive valuation with a 2.2 Price to Book Value. However, the stock is currently trading at a fair value compared to its average historical valuations. In the past year, while the stock has generated a return of 6.72%, its profits have only risen by 5.3%, resulting in a PEG ratio of 2.9.

Overall, the downgrade to 'Sell' by MarketsMOJO and the company's poor long-term growth and underperformance in the market suggest that investors should approach Rane Brake Lining with caution.