Will Buying Tata Motors Stock Drive You Toward Profits?

With shares of Tata Motors (NYSE:TTM) trading at around $25.02 is TTM an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

It’s not often we see a company that has been around for more than half a century and its growth in the past 10 years far exceeds its growth in years prior. Tata Motors has gained significant exposure throughout the world over the past decade. Aside from the United States, it has also taken market share away from other companies in the industry. In regards to exposure, buying Land Rover and Jaguar in 2009 has had a big impact. However, global excitement for Tata Motors began with the Nano several years earlier. Today, their Evoque is the big hit.

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In addition to building and selling automobiles that offer exceptional value, Tata Motors is the fourth largest truck and bus manufacturer in the world. This company continues to grow in different areas, and it’s slowly taking market share away from bigger names. The company’s margins are healthy and the current P/E Ratio is only 6.56.

E = Equity to Debt Ratio is Normal

The debt-to-equity ratio qualifies as normal, and it has been declining over the past few years, but it would be nice to see if it can be brought down a little lower.

Let’s take a look at how Tata Motors stacks up against its competitors, Honda Motor (NYSE:HMC) and Toyota Motor (NYSE:TM) when it comes to debt-to-equity ratio and cash vs. debt.

Debt-To-Equity

Cash

Long-Term Debt

TTM

1.03

$4.47 Billion

$7.87 Billion

HMC

.01

$12.47 Billion

$50.99 Billion

TM

.01

$38.94 Billion

$148.99 Billion

 

T = Technicals on the Stock Chart Are Strong

Tata Motors has outperformed Honda Motor and Toyota Motor over the past three years, but Tata Motors has lagged behind for the past month…