MarketsMOJO Downgrades TCFC Finance Due to Weak Long-Term Fundamentals

TCFC Finance, a microcap finance company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 5.33%. Additionally, the company has shown poor long-term growth, with net sales growing at an annual rate of -9.69% and operating profit at -28.69%.
Despite declaring positive results for the last three consecutive quarters, with PAT(9M) at Rs 9.86 crore growing at 728.57% and NET SALES(HY) at Rs 8.50 crore growing at 87.22%, TCFC Finance's stock is technically in a mildly bullish range. The MACD and KST technical factors are also bullish, but with an ROE of 8.9, the stock is fairly valued with a price to book value of 0.6. However, it is currently trading at a premium compared to its average historical valuations.

In the past year, TCFC Finance's stock has generated a return of 99.36%, outperforming the market (BSE 500) returns of 35.52%. This strong performance has been driven by a rise in profits of 305.2%, resulting in a PEG ratio of 0. The majority shareholders of the company are promoters, indicating their confidence in the company's future prospects.

While TCFC Finance may have shown strong market-beating performance in the past year, the recent downgrade by MarketsMOJO suggests caution for potential investors. With weak long-term fundamentals and a premium valuation, it may be wise to carefully consider all factors before making any investment decisions regarding TCFC Finance.