< !DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01//EN" "http://www.w3.org/TR/html4/strict.dtd">
Tata Motors (TTM)
They
may have a funny name, but they are a serious
company.
Watching
the Q2 earnings season
unfold, there is strength coming from transportation. Here in
the U.S., car and truck manufacturers,
retailers and even shipping companies are delivering strong results on
average.
Tata
Motors is a slightly different
company when compared to the typical US automaker. With roots
going all the way back to 1868, they
are well known in India for producing no-frills economy cars for the
masses, their
“Nano” model is considered “The Peoples Car” of India.
Around
the globe they offer more economy
and upscale brands of automobiles and provide transport and technology
solutions for governments.
TTM is
more of a conglomerate than
just an autos company. The Tata group
comprises over 100 companies in seven sectors: communications and
information
technology, engineering, materials, services, energy, consumer products
and
chemicals. Tata has operations in more than 80 countries and exports
products
and services to 85 countries all together. The company’s
major components are
Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power,
Tata
Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata
Communications
and Indian Hotels.
Tata
Steel is one of the top ten
steelmakers and Tata Motors is one of the top five commercial vehicle
manufacturers
in the world. TCS is a leading global software company and Tata Global
Beverages is the second-largest player in tea in the world. If that
wasn’t enough
Tata Chemicals is the world’s second-largest manufacturer of soda ash
and Tata
Communications is one of the world’s largest wholesale voice carriers.
Did I
mention that they also own
Land Rover and Jaguar?
Recent
Developments
TTM recently signed a contract to co-develop a new generation of
armored troop
carriers with Malaysian conglomerate DRB-HICOM which will be sold the
Malaysian
military as well as other customers. Tata
vehicles are in use by armies around the Indian ocean and Africa.
Tata
is also marketing certain models of the Land Rover brand as a durable
off road
vehicle
Speaking of, sales of Land Rovers, Ranger Rovers and Jaguars
jumped 60% in
China in 2011, and last month, the company signed a deal with China’s
Chery
Automobile to manufacture and sell luxury cars in China
Tata’s diversified exposure to industrial, commercial and
consumer products
really makes it a global growth play.
Similar to GE, it will respond as a barometer to global economic
health.
TTM
became a Zacks Rank 1 strong buy
on April 25th.
Financials
TTM is a large-cap (16.5 billion)
company based on the value of thier outstanding ADRs.
They currently trade a forward 12 month P/E of roughly 7.
On
February 14th, the conglomerate
reported an increase of 44% in net quarter over quarter revenue and an
18% jump
in revenue growth for Q3 FY 2012 versus the same period last year.
Because
TTM is foreign company that
trades as an ADR, analyst coverage is light.
TTM is expected to earn $3.51USD in FY2012 according to the Zacks
Consensus Estimate. They will report earnings on May 24th.
Market Performance &
Technicals
Tata’s stock price has almost doubled year to date, due both in part to
improvements in the U.S. and global outlook, but also on the company’s
strong performance
and increase in sales volume even though it is still facing challenges
in
Europe.
Surprisingly,
volume is heavy in the
stock, although it tends to “gap” in US markets because of responses to
the
much earlier opening of trading in India.
The stock is currently above its 50 and 200 day moving averages, which
stands at $27.85 and $21.05 respectively.
TTM has remained above both averages for the better part of 2012, but
because of a recent slowdown in appreciation it is getting close to the
support
of the 50 day. I think that level will
be key as it coincides with other key support points over the past
month or so.
TTM
has exceeded the S&P 500’s
performance by 15% in the past year and over 18% in the past 3 months.
Recent momentum has slowed in the past 30
days in which TTM only leads the index by about 3%.
Jared
A Levy is the
Momentum Stock Strategist for Zacks.com. He is also the Editor in
charge of the
market-beating Zacks
Whisper Trader Service.
TATA MOTORS-ADR (TTM): Free Stock Analysis Report
Be the first to comment