Sakthi Finance Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and Expensive Valuation

Sakthi Finance, 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 6.01%. Additionally, the company has shown poor long-term growth, with net sales growing at an annual rate of 3.72% and operating profit at 1.34%.
One of the main reasons for the 'Sell' rating is the company's expensive valuation, with a price to book value of 2.1 and a ROE of 7.1. This is significantly higher than its historical valuations, indicating that the stock is currently trading at a premium.

Despite generating a return of 131.38% in the past year, the company's profits have only increased by 28.6%, resulting in a PEG ratio of 1. This further supports the 'Sell' rating.

On a positive note, Sakthi Finance has declared positive results for the last 5 consecutive quarters, with its highest net sales, PBDIT, and PBT LESS OI in the last quarter. However, the stock is currently in a mildly bullish range, with technical indicators such as MACD, KST, and DOW showing bullish signals.

The majority shareholders of Sakthi Finance are its promoters, and the company has consistently outperformed BSE 500 in the last 3 annual periods. However, considering the current weak fundamental strength and expensive valuation, MarketsMOJO has downgraded the stock to 'Sell'. Investors are advised to carefully evaluate their investment decisions before investing in Sakthi Finance.