MarketsMOJO Downgrades Howard Hotels to 'Sell' Due to Weak Fundamentals and Underperformance

Howard Hotels, a microcap company in the hotel industry, has recently been downgraded to a 'Sell' by MarketsMOJO on August 2, 2024. This decision was based on several factors, including the company's weak long-term fundamental strength due to operating losses and poor growth in net sales over the last five years. Additionally, Howard Hotels has a weak ability to service its debt, with a poor EBIT to Interest ratio of -0.27.
In the most recent quarter, the company's results were flat, with the lowest PBDIT and PBT LESS OI. The EPS was also at its lowest at Rs -0.85. Furthermore, Howard Hotels has underperformed the market in the last year, with a return of only 23.55%, compared to the market's return of 37.36%.

On a positive note, the stock is currently in a mildly bullish range and has shown improvement in its technical trend since July 31, 2024, generating a return of -9.16%. Multiple factors, such as MACD, Bollinger Band, and KST, are bullish for the stock.

In terms of valuation, Howard Hotels has an attractive ROCE of 9 and a low enterprise value to capital employed ratio of 1.9. The stock is also trading at a discount compared to its historical valuations. However, it is important to note that while the stock has generated a return of 23.55% in the past year, its profits have decreased by -101.7%.

It is worth mentioning that the majority shareholders of Howard Hotels are the promoters themselves. This may be a cause for concern for potential investors, as it could indicate a lack of interest from external investors.

In conclusion, based on the recent downgrade and various factors, it may be wise for investors to approach Howard Hotels with caution and conduct further research before making any investment decisions.