One share which is very much under valued in the current market is Tata Motor-DVR shares, which is quoted at Rs. 234/- vis-a vis Tata Motor-Ordinary share valued at Rs. 425/-. World wide the price difference between the two type of stocks is not more than 5-10%.
These shares have differential voting rights of only 10% but carry 5% higher dividend than ordinary shares of Tata Motors. We, as ordinary small investors have no interest in day to day decision making of the company, thus need no voting rights. Therefore, it is worh buying at Rs. 234/- for a projected price of over Rs.350/- in next one year time, considering an EPS of Rs. 35/- to Rs. 45/- for 2014.
Over a period of time the price differential between the two types of shares should narrow down to 10% or less.
These shares have differential voting rights of only 10% but carry 5% higher dividend than ordinary shares of Tata Motors. We, as ordinary small investors have no interest in day to day decision making of the company, thus need no voting rights. Therefore, it is worh buying at Rs. 234/- for a projected price of over Rs.350/- in next one year time, considering an EPS of Rs. 35/- to Rs. 45/- for 2014.
Over a period of time the price differential between the two types of shares should narrow down to 10% or less.
No comments:
Post a Comment