Jet Freight Logistics Receives 'Sell' Rating from MarketsMOJO Due to Weak Long-Term Outlook

Jet Freight Logistics, a microcap logistics company, has recently received a 'Sell' rating from MarketsMOJO. 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 last 5 years, Jet Freight Logistics has seen a -12.54% CAGR growth in operating profits, which is a cause for concern. Additionally, the company has a high debt to EBITDA ratio of 5.31 times, indicating a low ability to service its debt.

Furthermore, the company's profitability per unit of shareholders' funds is also low, with a return on equity (avg) of 5.61%. This is a red flag for investors as it shows that the company is not generating enough profits for its shareholders.

Another concerning factor is that 26.16% of the promoter shares are pledged. In a falling market, this can put additional downward pressure on the stock prices.

Jet Freight Logistics has also underperformed the market in the last 1 year, with a return of only 18.93% compared to the market's return of 36.87%. This is a significant difference and raises doubts about the company's performance.

On a positive note, the company has shown some improvement in its financial results in March 2024. Its debt-equity ratio (HY) is at its lowest at 0.92 times, and its profit after tax (Q) is at its highest at Rs 2.67 crore.

However, the technical trend for the stock is sideways, indicating no clear price momentum. The stock has also generated -2.9% returns since the downgrade on 18th July 2024. The Bollinger Band, a key technical factor, has also been sideways since then.

Despite trading at a fair value compared to its historical valuations, with a ROCE of 3.6 and an enterprise value to capital employed ratio of 1, Jet Freight Logistics may not be an attractive investment option at the moment. In the past year, while the stock has generated a return of 18.93%, its profits have fallen by -5%. This further supports the 'Sell' rating given by MarketsMOJO.