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Tata Motors beats the automobile sector (TTM, IFN, CARZ)

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There has been precious little in the way of good economic news of late from India, as The India Fund ( IFN , quote ), is near its year low as is Tata Motors ( TTM , quote ).

But as far as car makers go, TTM just ranked first -- with a gain of 1.44% -- for best relative performance in the sector yesterday.

Relative outperformance is a bullish sign of underlying fundamental and technical strength. In terms of Tata's peer group, the exchange-traded fund for the automobile sector, First Trust Global Auto Fund Index ( CARZ , quote ), is close to its year low at around $22.50. The high for the year for CARZ is $31.83.

The plight of Tata Motors has been detailed in many articles on www.emergingmoney.com , including " Tough conditions for Tata Motors ."

Its hopes of great profits from the world's cheapest car, the Nana, have not transpired. The mass movement of "two wheels to four wheels" -- motorbikes to cars -- among consumers in India has stalled for a variety of factors.

Many factors make Tata Motors attractive, however. At around $16.60, the stock is trading close to its year low.

Start with an above-average dividend of 2.64% supported by a very low payout ratio of under 15%. The price-to-sales ratio is just 0.36. The short float is minuscule at 0.26%.

Over the next year, the mean analyst target price for Tata Motors (TTM) is $32.00.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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