Star Housing Finance Receives 'Sell' Rating

Star Housing Finance, a microcap company in the finance industry, has recently received a 'Sell' rating from MarketsMOJO on December 4th, 2023. This downgrade is due to weak long-term fundamental strength, with an average Return on Equity (ROE) of 7.43%. The stock is also trading at a premium compared to its historical valuations, with a Price to Book Value of 5.4.
One of the main reasons for the downgrade is the decreasing confidence of promoters in the company. They have reduced their stake by -1.6% in the previous quarter, currently holding only 20.62% of the company. This could be a sign of reduced confidence in the future of the business.

However, the company has declared positive results for the last 7 consecutive quarters, with a PAT (9M) growth of 24.55% and the highest NET SALES(Q) and PBDIT(Q) at Rs 13.67 cr and Rs 8.88 cr respectively. The stock is also technically in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend.

In terms of performance, Star Housing Finance has outperformed the BSE 500 in the last 3 years, 1 year, and 3 months, with a return of 38.78% in the last 1 year. However, the PEG ratio of the company is 1.6, which suggests that the stock may be overvalued.

Overall, while the stock has shown market-beating performance in the long term, the recent downgrade by MarketsMOJO and decreasing promoter confidence may be cause for concern for potential investors. It is important to carefully consider all factors before making any investment decisions.