Century Extrusions downgraded to 'Sell' by MarketsMOJO due to weak financials and technical outlook

Century Extrusions, a microcap company in the aluminium and aluminium products industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 14, 2024. This downgrade is based on the company's weak ability to service its debt, with a poor EBIT to Interest (avg) ratio of 1.74. Additionally, the company has a low profitability per unit of shareholders funds, with a Return on Equity (avg) of 8.10%.
Furthermore, the company has shown poor long-term growth, with only a 10.66% annual growth in Net Sales and a 13.98% growth in Operating profit over the last 5 years. In the latest quarter, the company's interest expenses were at a high of Rs 2.64 crore, indicating potential financial strain.

Technically, the stock is currently in a Mildly Bearish range, with a deteriorating trend since November 14, 2024, resulting in a -5.06% return. The Bollinger Band and KST technical factors also suggest a Bearish outlook for the stock.

On the other hand, the company has an attractive valuation with a ROCE of 19.1 and a 1.9 Enterprise value to Capital Employed. However, the stock is currently trading at a discount compared to its average historical valuations. While the stock has generated a return of 27.29% in the past year, its profits have only risen by 10.7%, resulting in a PEG ratio of 2.

The majority shareholders of Century Extrusions are the promoters, indicating their strong control over the company. However, the stock has consistently outperformed the BSE 500 index in the last 3 annual periods, generating a return of 27.29%. Overall, considering the company's weak financials and technical outlook, it may be wise to sell the stock at this time.