Ken Heebner Purchases Stake in Tata Motors
- By Kyle Ferguson
During the second quarter, guru Ken Heebner (Trades, Portfolio) purchased 210,000 shares of Tata Motors ( TTM), at an average price of $31.28 per share. Since Heebner purchased his stake in Tata Motors, the company has risen an estimated 24% in price.
Warning! GuruFocus has detected 5 Warning Sign with TTM. Click here to check it out.
The intrinsic value of TTM
Tata Motors is India's largest automobile company. It manufactures cars, utility vehicles, buses, trucks and defense vehicles. The company was established in 1945, and it has since expanded its operations to being the world's fifth-largest motor vehicle manufacturing company, the fourth-largest truck manufacturer, and second-largest bus manufacturer in the world by volume. The company has 60,000 employees worldwide, and it has sold more than 9 million vehicles since it was founded.
Tata Motors has a market cap of $26.28 billion, an enterprise value of $30.49 billion, a P/E ratio of 17.88 and a P/B ratio of 2.27.
According to GuruFocus, Tata Motors has a 5 of 10 financial rating with a cash to debt ratio of 0.56, ranking it beneath 54% of the companies in the global auto manufacturers industry. The company also has a 5 of 10 profitability and growth rating with an ROE of 30.48%, an ROA of 9.26% and an ROC of 44.52, ranking it above 90% of the companies in its industry.
Heebner may have purchased a stake in Tata Motors because the company is one of the largest automobile manufacturers in the world with 71 years of operating experience. The company has been successfully expanding its operations, and it has reported strong numbers in multiple areas of its financial statements over the previous decade. Its EBITDA has increased by 34%, revenue growth by 24.40%, book value growth by 23.10%, and its operating income growth has increased by 20.5% over the previous 10 years.
Below is a Peter Lynch chart for Tata Motors.
Heebner is a value investor who follows the same basic principles as Warren Buffett (Trades, Portfolio). He likes to invest in companies that he can understand. Since 1998 his Capital Growth Management Fund has returned an estimated 12%, which marginally outperformed the S&P 500 during the same time period.
Cheers to your investment success.
Disclosure: Author does not own any shares of this company.
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This article first appeared on GuruFocus.
Warning! GuruFocus has detected 5 Warning Sign with TTM. Click here to check it out.
The intrinsic value of TTM
