Sreeleathers downgraded to 'Sell' by MarketsMOJO due to poor management and slow growth

Sreeleathers, a microcap trading company, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was based on several factors, including poor management efficiency with a low return on equity (ROE) of 6.63%. This indicates that the company is not generating enough profits per unit of shareholders' funds.
In addition, the company has shown poor long-term growth with net sales growing at an annual rate of only 4.72% and operating profit at 2.29% over the last 5 years. This trend was also reflected in the negative results of the company in June 2024, with a -28.92% growth in profits and the lowest net sales and PBDIT (profit before depreciation, interest, and taxes) in the quarter.

Another concerning factor is that despite its size, domestic mutual funds hold only 0% of the company. This could indicate that they are not comfortable with the company's current price or its business.

On a positive note, Sreeleathers has a low debt to equity ratio and an attractive valuation with a price to book value of 1.9. However, the technical trend of the stock is currently sideways, indicating no clear price momentum. In fact, since the downgrade on August 26, 2024, the stock has generated a negative return of -1.07%.

It is important to note that while the stock has generated a return of 38.92% in the past year, its profits have actually fallen by -5.7%. This could be a cause for concern for potential investors.

In conclusion, based on the recent downgrade and various factors such as poor management efficiency, negative results, and low interest from domestic mutual funds, it may be wise to approach Sreeleathers with caution.