MarketsMOJO Downgrades AD Manum Finance to 'Sell' Due to Weak Long-Term Fundamentals and Overvalued Stock Price

AD Manum Finance, a microcap finance company, has recently been downgraded to a 'Sell' by MarketsMOJO on November 8, 2024. This decision was based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 5.53% and poor long-term growth as Net Sales has only grown by an annual rate of 7.11%.
Despite declaring positive results for the last 3 consecutive quarters, with PAT(HY) at Rs 4.38 cr growing at 100.92% and NET SALES(HY) at Rs 6.46 cr growing at 58.72%, MarketsMOJO still believes that the stock is not a good investment option.

Technically, the stock is currently in a mildly bullish range, with its MACD and KST technical factors also showing bullish signals. However, with an ROE of 14, the stock is fairly valued with a 1.1 Price to Book Value. It is also trading at a premium compared to its average historical valuations.

Over the past year, the stock has generated a return of 78.26%, but its profits have only risen by 89.1%, resulting in a PEG ratio of 0.1. This indicates that the stock may be overvalued and not a good investment option.

The majority shareholders of AD Manum Finance are its promoters, who have consistently generated returns over the last 3 years. In fact, the stock has outperformed BSE 500 in each of the last 3 annual periods, making it a popular choice among investors.

In conclusion, while AD Manum Finance may have shown positive results in the last few quarters, its weak long-term fundamentals and overvalued stock price make it a 'Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.