HLL vs ITC which one should you hold?

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Comparing Stocks within the same sector
The Equity Desk Forum :Market Strategies :Our stocks. Buy hold or sell - The help ourselves Board :Comparing Stocks within the same sector

Topic: HLL vs ITC which one should you hold?

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basant Admin Group Joined: 01/Jan/2006 Location: India Online Status: Offline Posts: 18403	Posted: 22/Feb/2007 at 5:19pm
	Are you sure that the company would grow EPS by more then 15% - sooner rtather then later the PE's will start to correct a bit since they are presently indicating higher growth rates.Those 25+ PE's seem a bit costly for a company that is growing at less then that.
	'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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tggyp Newbie Joined: 25/Jan/2007 Location: India Online Status: Offline Posts: 7	Posted: 22/Feb/2007 at 5:33pm
	That i agree sir, but the dividend yield in this stock which is a market leader in many categories it operates makes me have a look at it. There are issues related to pricing power but with a portfolio that it has and international parentage it should be able to overcome the margin threat from retailers.
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basant Admin Group Joined: 01/Jan/2006 Location: India Online Status: Offline Posts: 18403	Posted: 22/Feb/2007 at 5:43pm
	Yes dividend yield should protect downside and more importantly this company seems to have fallen off everybody's radar - maybe that could help! Personally I am not bullish on HLL though. Edited by basant - 22/Feb/2007 at 5:46pm
	'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Ajith Senior Member Joined: 06/Aug/2006 Location: India Online Status: Offline Posts: 1284	Posted: 22/Feb/2007 at 10:31pm
	I agree and feel that the time to buy HLL will come not now but later because right now the PE is too high given the growth rate.Considering the consumtion boom ,demand should be high but uncertainty about competitive pressures and input prices affecting growth rates and profitablity makes it difficult to be optimistic about the share price right now.Nestle may be a better bet. Edited by Ajith - 22/Feb/2007 at 10:35pm
	Ajith
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Mohan Senior Member Joined: 09/Feb/2007 Location: United States Online Status: Offline Posts: 1855	Posted: 22/Feb/2007 at 12:34pm
	ITS has the tendency to diworsify from time to time wheres HLL is a very tightly run operation. high ROE is one of the factors that buffet looks for. However margin of safety is the point to be debated here.
	Be fearful when others are greedy and be greedy when others are fearful.
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xbox Senior Member Joined: 10/Sep/2006 Online Status: Offline Posts: 2001	Posted: 22/Feb/2007 at 4:56am
	In my personal opinion ITC is never buy candidate. There are many reasons for that ... 1. It's cash cow cigarette biz is prone to public/govt litigations. Almost all US cigarette companies are paying huge money after losing their cases. Honestly also cigarette is unhealthy business. 2. Management is pathetic. In era of demerger, they merged their hotel company into it. Market don't like conglomerate status. Such a vast diversification makes ITC a poor candidate for strategic buyers. 3. Paper business has not made wealth anywhere in the world. It is such a complex business with no pricing power. They are investing their cash in such poor sectors. 4. Planned foray into FMCG also looks pathetic. Market is quite saturated and cost of raw material is ever increasing. Also it will take long time for them to get pricing power. HLL, P&G are such old players but still they don't have enough pricing power. How can we assume ITC will get it. Also with organized retail coming to India in big way, chances for pricing power looks slimmer. 5. Management is such a pig. They have never made killing in any businesses except cigarette but this was child given to them from BAT. Hotels are again a very difficult business which functions like commodity. 6. Their garment retail foray was done at right time but see where are they now. They are not aggressive here as well. ITC could be left for Mugerilals.
	Don't bet on pig after all bull & bear in circle.
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tigershark Senior Member Joined: 13/Oct/2006 Location: India Online Status: Offline Posts: 3542	Posted: 09/Mar/2007 at 7:31pm
	at amkt cap of 56400 crs itc is available at roughly2.5timesits 08 sales.considering a eps of 10 for 08 the stock is available at 15 times forward earnings.being a diversified co the pe will tend to be lower compared to other cos growing at 22 %pa.still if one looks at the steps taken by the mngmt the pedigree of the mngmtwith a 3-5 yr investment horizon for steady if not phenomenal appreciation can itc be considerd as a good investment at the current price of 140-150.TEDS pl discuss ...one can visit www.itcportal.com for all co details.iam not very good with posts so i have given the web site for details Edited by tigershark - 09/Mar/2007 at 7:38pm
	understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things
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tigershark Senior Member Joined: 13/Oct/2006 Location: India Online Status: Offline Posts: 3542	Posted: 10/Mar/2007 at 11:25am
	what do teddys feel bout ITC at 15 times o8 earnings is this stock bcoming undervalued and is too much being seen into the more than 4% vat it may have to pay on cigarettes.the stock may not be a blockbuster but it could be asteady compounder over the next 5 yrs.
	understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things
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