MarketsMOJO Downgrades Hardcastle & Waud Mfg Co to 'Sell' 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 October 7, 2024. This decision was based on the company's weak long-term fundamental strength, with a -1.04% CAGR growth in operating profits over the last 5 years. Additionally, the company's ability to service its debt is also a concern, with a poor EBIT to Interest (avg) ratio of 0.85.
Furthermore, the company's profitability per unit of shareholders' funds is low, with a Return on Equity (avg) of 1.75%. This is reflected in the company's expensive valuation, with a price to book value of 1.5 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, Hardcastle & Waud Mfg Co has declared positive results for the last 4 consecutive quarters, with its ROCE(HY) and PBDIT(Q) at their highest levels. The stock is also technically in a mildly bullish range, with its MACD and KST technical factors showing a bullish trend.

The majority shareholders of the company are the promoters, and the stock has consistently generated returns over the last 3 years. In fact, in the last 1 year, the stock has outperformed BSE 500 and has generated a return of 125.55%. However, it is important to note that this strong performance may not be sustainable in the long run.

In conclusion, while Hardcastle & Waud Mfg Co may have shown positive results in the past year, its weak long-term fundamentals and expensive valuation make it a 'Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.