Tata Motors (TTM)

Bought at: 16.59
Target: 20-22

The SENSEX is really volatile. After being fairly in line / outperforming the SENSEX for two years, TTM has seriously diverged from the index in the last year. It seems like a great distressed value play. There has been no change to the fundamentals of the company since January, although the stock has fallen from 22 to 16 in the meanwhile. I believe that the recent run-up is from the rupee strengthening against the dollar (16 to 17.5).

I think that the price will go back up after TTM's next earnings call and once we start seeing the cash flows from their really cheap car ($2500, to be produced in 2008). But who knows? It might hit 20-22 before then and I'd have to reconsider.