Step Two Corporation Receives 'Sell' Rating from MarketsMOJO Due to Weak Long-Term Performance

Step Two Corporation, a microcap company in the finance/NBFC industry, has recently received a 'Sell' rating from MarketsMOJO on April 1, 2024. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 3.49% and poor long-term growth in operating profit, which has only grown at an annual rate of 8.73%.
In contrast, the company did show positive results in December 2023, with its PAT (Q) reaching a high of Rs 0.60 crore and EPS (Q) at Rs 1.30. However, these positive results do not outweigh the overall weak performance of the company.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. However, with an ROE of 22.8, the stock is fairly valued with a price to book value of 2.8. It is also trading at a fair value compared to its average historical valuations.

While the stock has generated a return of 180.65% in the past year, its profits have only risen by 117%, resulting in a PEG ratio of 0. This indicates that the stock may be overvalued and not a good investment option.

The majority shareholders of Step Two Corporation are the promoters, which may raise concerns about the company's management and decision-making.

Despite its market-beating performance in the long term and near term, with a return of 180.65% in the last year and outperforming BSE 500 in the last 3 years, 1 year, and 3 months, the recent downgrade by MarketsMOJO suggests that investors should be cautious when considering investing in Step Two Corporation.