Hardcastle & Waud Mfg Co Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals and Expensive Valuation

Hardcastle & Waud Mfg Co, a microcap company in the paints industry, has recently been downgraded to a 'Sell' by MarketsMOJO on June 18, 2024. This decision was based on several factors, including weak long-term fundamental strength, poor ability to service debt, and low profitability per unit of shareholders' funds.
One of the main reasons for the downgrade is the company's weak CAGR growth in operating profits over the last 5 years, which stands at -1.04%. Additionally, the company's EBIT to Interest ratio is only 0.85, indicating a weak ability to service its debt. Furthermore, the company's Return on Equity (avg) is only 1.75%, which is considered low and reflects a low profitability per unit of shareholders' funds.

In terms of valuation, Hardcastle & Waud Mfg Co has a very expensive valuation with a Price to Book Value of 1.1 and a PEG ratio of 0.2. However, the stock is currently trading at a fair value compared to its average historical valuations.

On a positive note, the company has declared positive results for the last 3 consecutive quarters and has shown a ROCE (HY) of 6.79% and a PAT (9M) of Rs 2.01 Cr. Additionally, the stock is technically in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend.

It is worth noting that the majority shareholders of Hardcastle & Waud Mfg Co are the promoters, which may provide some stability to the company's operations. Furthermore, the stock has consistently outperformed the BSE 500 index in the last 3 annual periods, generating a return of 89.87%.

In conclusion, while Hardcastle & Waud Mfg Co has shown some positive results in the last few quarters, the overall weak fundamental strength and expensive valuation make it a 'Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.