Tata Motors a good buy?
Betadpur said, it was difficult to figure out a valuation for Tata Motors. “We have looked at the street estimates. It is all over the place as far as earnings per share (EPS) for 2011, our own numbers are around Rs 20 and we can give it a 30 multiple and that gives you Rs 600 - 30 multiple seems a little too much but that is where we are. If we say everything goes well for the stock, Jaguar-LandRover picks up by 2011, that is generating a lot of cash flow for the company and the EPS goes from our current estimates 20 to 30 and then you give it a 30 multiple, you get to Rs 900-1,000 target. That is what some people on the street are saying that Tata Motors can get to Rs 1,000. That is how we believe on the numbers but I don’t think everything is going to go positive for this company. “
What a jerk!!
1) He is not saying anything
2) He is not even providing any justification for his dumbass arguments - why should it trade at 30 times? What will make EPS increase 50%? Cash flow does not equate EPS. So what specifically will make EPS rise? What about the debt overhang? What about historical valuations?
Jokers like this really get my goat. And what business does CNBC have putting such brain-dead pretenders on air? The irony is that about 20,000 people would have read this and will call their brokers tomorrow with orders to buy Tata Motors, saying they have heard (on authority) that it will soon touch Rs 1000!!
They deserve the slaughtering they are going to get!
PS: I have nothing against Tata Motors. I think they make damn good SUVs!!
1 comment:
P/E of 30??? HOW?
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