MarketsMOJO downgrades Chartered Capital & Investment due to weak fundamentals and growth concerns

Chartered Capital & Investment, a microcap finance company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 1.15%. Additionally, the company has shown poor long-term growth, with Net Sales growing at an annual rate of 40.57% and Operating profit at 45.23%.
Despite declaring positive results for the last 3 consecutive quarters, with the highest PAT(Q) at Rs 2.13 cr. and EPS(Q) at Rs 7.08, the technical trend for the stock is sideways, indicating no clear price momentum. The technical trend has also deteriorated from Mildly Bullish on 06-Aug-24 and has generated 4.9% returns since then.

However, with an ROE of 3.3, the stock does have an attractive valuation with a 0.4 Price to Book Value. It is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of 31.85%, while its profits have risen by 509%. The PEG ratio of the company is 0, indicating a potential undervaluation.

It is worth noting that the majority shareholders of Chartered Capital & Investment are the promoters themselves. This may raise concerns about potential conflicts of interest and could be a factor contributing to the downgrade by MarketsMOJO.

Investors should carefully consider these factors before making any decisions regarding Chartered Capital & Investment stock. While the company has shown positive results in recent quarters, its long-term fundamental strength and growth potential may be cause for concern.