Actual Question:
I m going to buy Ashok Leyland share and going to hold it for 5 year or more is it good investment?Answer:
Please
do not buy Ashok Leyland shares presently. The company does not qualify for inclusion
in a safe value investing portfolio especially under the present market
conditions, which makes the scrip expensive.
I
have prepared and posted a brief investment research report on the scrip on my
blog. You may:
- View the report at: Ashok Leyland Investment Research
Report
- Download for free at: Company Reports-Ashok Leyland.pdf
Here
I reproduce the final conclusions:
- Ashok Leyland is without doubt a
wonderful company and brand.
- The truck business in the auto
sector is very challenging.
- Sales are linked with the
country’s economic growth
- Competition from new aggressive
multinational entrants in the past two decades
- The company’s performance is
average in the challenging environment.
- The market conditions, especially
the steep increase in share price in the last three years, has taken the
price to earnings (PE) and price to book (P2BV) ratio out of a value
investor’s acceptable levels.
- The share is not recommended for
inclusion under the present market conditions.
- Even when market conditions vastly
improve and bring down the PE and P2BV ratios, the company’s performance
with present profitability and balance sheet ratios will only suggest
inclusion as a means of diversification rather than as an attraction.
Instead
of Ashok Leyland, you may consider investing in the following which are both
good companies and available at attractive valuations:
|
Name of the Stock
|
Read Research Report
|
Download Research Report
|
|
Rural Electrification Corporation
|
||
|
Power Finance Corporation
|
||
|
Great Eastern Shipping Co. Ltd.
|
Great
Eastern Shipping Research Report |
Great
Eastern Shipping Company |
The
above three scrips I have been investing for a long time and invested in this
December, 2016 also.