Super Tannery Receives 'Sell' Rating from MarketsMOJO Due to Weak Long-Term Outlook

Super Tannery, a microcap company in the leather industry, has recently received a 'Sell' rating from MarketsMOJO on September 2, 2024. This downgrade is based on several factors that indicate a weak long-term outlook for the company.
One of the main reasons for the 'Sell' rating is the company's weak fundamental strength. Over the past 5 years, Super Tannery has only seen a -1.13% CAGR growth in operating profits, which is a cause for concern. Additionally, the company has a high debt to EBITDA ratio of 4.22 times, indicating a low ability to service its debt.

Furthermore, Super Tannery has a low return on equity (ROE) of 5.75%, which means that the company is not generating enough profits per unit of shareholders' funds. This is a red flag for investors.

In terms of recent performance, the company's results for June 2024 were flat. However, the interest expenses have increased by 55.21%, which could put additional pressure on the company's financials.

Another concerning factor is that 51.12% of the promoter shares are pledged. In a falling market, this could lead to a further decline in the stock price.

On a positive note, the stock is currently in a mildly bullish range and its MACD and KST technical factors are also bullish. However, with a ROCE of only 6.5%, the stock is considered to be attractively valued with a 1.2 enterprise value to capital employed.

Despite the recent market-beating performance of 58.73%, Super Tannery's profits have only increased by 6.5% in the past year, resulting in a PEG ratio of 3.2. This indicates that the stock may be overvalued compared to its earnings growth.

In conclusion, Super Tannery's recent 'Sell' rating from MarketsMOJO is based on its weak long-term fundamentals and high promoter pledged shares. While the stock has outperformed the BSE 500 in the past 3 years, 1 year, and 3 months, investors should carefully consider the company's financials before making any investment decisions.