Paragon Finance Receives 'Sell' Rating from MarketsMOJO Due to Weak Long-Term Fundamentals and Expensive Valuation

Paragon Finance, a microcap finance company, has recently received a 'Sell' rating from MarketsMOJO on September 2, 2024. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 5.20%. Additionally, the company has shown poor long-term growth, with a decline in net sales and operating profit.
One of the main reasons for the 'Sell' rating is the company's expensive valuation, with a price to book value of 1. This is considered fair compared to its historical valuations. Despite generating a return of 108.67% in the past year, the company's profits have only increased by 16.5%, resulting in a PEG ratio of 1.4.

On a positive note, Paragon Finance reported strong results in the quarter ending June 2024, with the highest PAT (profit after tax) of Rs 1.01 crore and EPS (earnings per share) of Rs 2.38. The stock is also technically in a mildly bullish range, with multiple factors such as MACD, KST, and DOW indicating a bullish trend.

The majority shareholders of Paragon Finance are the promoters, which can be seen as a positive sign for the company. Additionally, the stock has consistently outperformed BSE 500 in the last 3 annual periods, generating a return of 108.67%.

In conclusion, while Paragon Finance has shown some positive results in the recent quarter, the overall weak long-term fundamentals and expensive valuation have led to a 'Sell' rating from MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.