Actual Question:
Which
is the better stock in tyre stocks for 1 year time horizon?
Answer:
 |
| Automobile tyre |
Dear Friend!
See the comparative study of four tyre companies:
|
Tyres
|
APPOLLO TYRES
|
MRF
|
PTL Enterprises
|
|
Operating
Margin %
|
12.61%
|
14.60%
|
88.43%
|
|
Gross
Profit Margin
|
9.76%
|
11.40%
|
86.92%
|
|
Net
Profit Margin
|
5.03%
|
6.76%
|
42.81%
|
|
ROI
|
16.23%
|
19.87%
|
21.69%
|
|
Return
on Long Term Funds
|
27.04%
|
27.47%
|
28.72%
|
|
Long
terb debt/ equity
|
0.26
|
0.26
|
0.53
|
|
Total
Debt Equity
|
0.32
|
0.40
|
0.53
|
|
Current
Ratio
|
0.87
|
1.34
|
0.44
|
|
Quick
Ratio
|
0.35
|
0.82
|
0.40
|
|
COMPANY
PERFORMANCE (FOR FURTHER STUDY)
|
REJECTED
|
REJECTED
|
REJECTED
|
Finally the big question arises that when you can buy excellent companies with 50% PAT margins from other sectors at very reasonable valuations, why should one invest in tyre companies struggling with PAT margins below 10%?
As far as your next point of investment horizon is
concerned, one year is nothing. A good investor does not buy shares for one
year but for the lifetime. Purchasing even a single share is like owing the
business 100%. Will anybody start a new business with a time horizon of one
year?
Please
read the book “The Intelligent Investor” by Benjamin Graham. Learn value
investing. Become rich and wealthy slowly and safely over a long time.
Suggested
Further Reading:
Thank
you,
With
Best Regards
Anand