Step Two Corporation Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and Technical Indicators

Step Two Corporation, a microcap company in the finance/NBFC industry, has recently received a 'Sell' rating from MarketsMOJO on 2024-08-16. This downgrade is based on several factors, including weak long-term fundamental strength with an average Return on Equity (ROE) of 3.49% and poor long-term growth with an annual operating profit growth rate of 8.73%.
Technically, the stock is currently in a Mildly Bearish range, with its trend deteriorating from Mildly Bullish on 16-Aug-24. Since then, the stock has only generated a return of 4.99%. The MACD and KST technical factors also indicate a Bearish trend.

In terms of financials, Step Two Corporation has shown its highest PBDIT(Q) at Rs 2.10 cr., PBT LESS OI(Q) at Rs 2.11 cr., and PAT(Q) at Rs 1.75 cr. Its ROE of 23.2 makes it an attractive valuation with a 2.8 Price to Book Value. However, the stock is currently trading at a fair value compared to its average historical valuations.

Despite generating a return of 149.47% in the past year, which is significantly higher than the market (BSE 500) returns of 36.18%, the company's profits have only risen by 68%. This results in a PEG ratio of 0.1, indicating that the stock may be overvalued.

It is worth noting that the majority shareholders of Step Two Corporation are its promoters. This could potentially impact the company's decision-making and future performance.

In conclusion, while Step Two Corporation has shown impressive market-beating performance in the past year, its weak long-term fundamentals and technical indicators suggest a 'Sell' rating. Investors should carefully consider these factors before making any investment decisions.