MarketsMOJO Downgrades The Investment Trust of India to 'Sell' Due to Weak Fundamentals and Expensive Valuation

The Investment Trust of India, a smallcap finance/NBFC company, has recently been downgraded to a 'Sell' by MarketsMOJO on October 21, 2024. This decision was based on weak long-term fundamental strength, with an average Return on Equity (ROE) of 1.48% and poor long-term growth in net sales and operating profit.
In addition, the stock has a very expensive valuation with a price to book value of 1.6 and is trading at a premium compared to its historical valuations. Despite generating a return of 133.92% in the past year, the company's profits have only risen by 115.7%, resulting in a PEG ratio of 0.3.

Another concerning factor is that domestic mutual funds hold only 0% of the company, indicating that they may not be comfortable with the stock's price or business. This is significant considering the capability of mutual funds to conduct in-depth research on companies.

However, there are some positive factors to note. The company has shown positive results in June 2024, with a 35.40% growth in PAT (HY) and the highest EPS (Q) at Rs 2.37. The stock is also technically in a mildly bullish range, with its MACD and KST technical factors also showing a bullish trend.

Moreover, The Investment Trust of India has a track record of market-beating performance in the long term as well as the near term. In addition to generating a return of 133.92% in the past year, the stock has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months.

In conclusion, while The Investment Trust of India may have some positive factors, the recent downgrade to 'Sell' by MarketsMOJO and the concerning valuation and lack of interest from domestic mutual funds may be cause for concern for potential investors. It is important to carefully consider all factors before making any investment decisions.