Cambridge Technology Enterprises Receives 'Sell' Rating Despite Recent Positive Results

Cambridge Technology Enterprises, a microcap IT software company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, with a -22.68% CAGR growth in operating profits over the last 5 years. Additionally, the company has a low profitability per unit of total capital, with a Return on Capital Employed (avg) of 9.48%.
One of the main reasons for the 'Sell' rating is the company's expensive valuation, with a ROCE of -3.5 and an enterprise value to capital employed ratio of 1.5. This indicates that the stock is trading at a premium compared to its historical valuations. Furthermore, while the stock has generated a return of 70.24% in the past year, its profits have declined by -86.5%.

However, there are some positive factors for the company. In December 2023, Cambridge Technology Enterprises declared positive results after two consecutive negative quarters. Its net sales for the last 9 months have grown by 23.92%, and its PBDIT (quarterly) is at its highest at Rs 13.31 crore. The company's operating profit to net sales (quarterly) is also at its highest at 25.17%.

Technically, the stock is in a mildly bullish range, with multiple factors such as MACD, KST, and OBV indicating a bullish trend. The majority of the shareholders are non-institutional, and the stock has shown market-beating performance in the long term as well as the near term. In addition to generating a 70.24% return in the last year, the stock has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months.

Overall, while Cambridge Technology Enterprises has received a 'Sell' rating from MarketsMOJO, the company has shown some positive growth in its recent results. Investors should carefully consider all factors before making any decisions regarding this microcap IT software company.