Hero Honda: Dividend Stock for Long Term Investment

hero_honda_logoHero Honda Motors Limited (HEROHONDA) is India’s largest 2 wheeler motorcycle manufacturer in India. It has two manufacturing facilities at Dharuhera and Gurgaon in Haryana, which produce over 3 million bikes per year. It is has largest market share in excess of 50% in Indian two wheeler segment.

One notable aspect that I personally like about HEROHONDA is its positioning in the market segment. It satisfies the vehicular needs of large number of middle class in India. It is very well positioned in a sense that recessionary trend, slow down, or increase in oil price improves its sales and revenue. This is evident by relatively stable stock during this current market turbulence since Year 2009.

Trend Analysis

The whole reason for any business to exist is to generate sales revenue and make more profits. At a minimum, the parameters listed below should have continuously increasing trends. All the data below is based on last 8 years i.e. from 2001 to 2008.

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Interesting Reader Questions

I receive questions in my email and once in a while I like to sample out few interesting ones. In last one month or so, I received two very interesting questions on which I presenting my thoughts below.

Why do you make your analysis very length and elaborate, although I like the completeness? Is it really required? Looking at EPS, P/E ratio and similar four or five parameters should be good enough to make a judgment decision.

Completeness cannot be obtained without being elaborate. Am I right? I do not now weather a length of analysis is required or not. In my view, length is not a barometer in my analysis process. I am looking for few things based on my objective, and I pursue it to understand it better. Many times I stop short knowing it is not going to be worthwhile to continue. I am looking for generating income using dividends and capital appreciation.

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Suggested Reading – August 3, 2009

Blogosphere is an interesting place where you find various bloggers expressing their viewpoints. I am listing some of the articles that I enjoyed reading.

My Article in Blogosphere

Economy, Finance, Investing.…..

These are some diverse set of articles from fellow bloggers and business magazines. I hope you enjoy reading all or some of these interesting posts.

Power Companies leading the Renewed IPO Buzz

ist1_916688-male-gossips-2Yes, the buzz is back and testing markets and testing mettle of individual investors. Three power sector companies, viz. Adani Power, Indianbulls Power, and NHPC, are in fray to get investors money. I had expressed my thoughts about Reliance Power IPO. Let us revisit some of the few tidbits in the context of this latest buzz.

Adani Power was priced in the range of Rs. 90 to Rs. 100 per share. It completed the subscription period and based on the NSE data; it was over subscribed by 20 times. My viewpoint is, its the herd mentality and craze continues. We individual investors never learn our lessons.

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