International Investment term paper
To make a decision on which global country to invest in, one should consider understanding the country’s economy and country risks as classified under being developed or emerging economies. International investments however has got numerous risks facing including the rampant changes in the currency exchange rates, fluctuations in the market value, major political, economic or social events, low liquidity levels and inadequacy in crucial information among others (Subedi, 2016). Case study In this paper, I discuss my choice of investing in USA based MNCs that is General Motors company Inc. (GM) and Forward industries, Inc. (FORD). 43 Foreign stocks (ADRs) Firm’s Name Symbol Country Amount Invested Purchase Price per share of ADR stock Tata Motors Limited TTM India $ 10,000 $ 30. 96 Mahindra & Mahindra Limited M&M.
NS India $ 10,000 $ 756. 90 General Motors company Inc. (GM) General Motors Company Inc. 22% of the total shares have been acquired by insiders, 77. 84% of the shares have been acquired by institutions which include the Vanguard Group, Inc. which has the highest number of shares amounting to 6. 7 % of the subsequent shares, the Blackrock Inc. institution and many others. 1 M. this shows an overselling of shares since the number exceeds the average shares in one quarter (Pudar, 2014). Financial Highlights The most recent quarter being September 30, 2018, the profits margin of the company was 0. 56% with an operating margin of 5. This shows that the company made very small profits but a return on assets of 2. 19 which is less than the purchase price of one share. This shows a drop in the financial stability of the company.
The primary reason for the drop in the price of shares and risks associated are illustrated in fig. 3 Conclusion The GM is commonly affected by the economy at which the company is situated or based. According to the information obtained from yahoo finance, it shows clearly that the market at which GM is based is not favoring and this results in the poor performance of the company. It deals with carrying cases and different accessories for medical monitoring kits and sporting products and recreation equipment. Other products include the bar code scanners, different smartphones and tablets and many others. It was founded in 1954 and has its headquarters in West Palm Beach, Florida. According the company’s corporate governance, the quality score is inapplicable to the management.
This means that company has got high risk on the management where there is no guarantee of good governance. 44 and a quarterly growth of revenue up to 30. The quarterly earnings growth of the company remained negative 57. 30% which translates to a poor performance. According to the balance sheet, the company earns a total cash amounting to $ 4. 34 M. 60 % of the total shares are held by institutions which include Renaissance Technologies, LLC with proportionate shares of 8. 23% of the float shares are held by other institutions with eighteen institutions holding shares. These include Blackrock Inc. , Morgan Stanley and many others. The top fund holders are Vanguard extended market Index fund, Fidelity extended market index fund, and many others representing the little institutions for mutual funds.
Tata Motors Limited (TML) Tata Motors Limited (TML) is a consumer cyclical company in the auto manufacturing industry under the leadership of Mr. Guenter Butschek as the CEO and managing director. The company was founded in 1945 and has its headquarters in Mumbai, India. The company is associated with designing, manufacturing, and selling a range of automotive vehicles. The company sells cars, trucks, buses and all related spare parts and accessories. and Citigroup Inc. all totaling to302 institutions holding shares for TML. Additionally, other institutions for mutual funding include Advisors Inner Circle Fund which takes the largest portion of up to 2. 69% of the mutual funds. Others include JP Morgan Emerging Markets Equity Fund and the Columbia ETF Trust which holds the larger portions of the mutual funding.
According to the company’s income statement, the total revenue ranged $ 44. 53 B while the revenue per share was $ 63. The company recorded a quarter revenue growth of 2. 80% where the gross profit was 1. 26 T. 47 is made over the S&P 500 market and goes down in the other quarters thereafter. Share Statistics The average volume of shares over the last quarter was 2. 06 M with a float of 447. 51 M shares. 15 % of the shares are held by institutions while none are held by insiders. The quarterly results shown below illustrates the profits made during the study period in which I invested in this company. It is clear that the net profits for both quarters are not increasing but rather decreasing proportionately in fluctuations and so the stocks fluctuate making the company unfavorable for investors.
For the annual results below, the same trend can be seen and this discourages more investors to get in the company and even forces the few investors to find ways to exit the investment. The Tata Motors Industries performance has been compounded in profits for the last ten years and shows negative profit growths. This gives a bad picture to the company in the investors’ sight and leads to their withdrawal. This showed a very bad picture and manifested that the company was not in a good financial health. Additionally, better performing companies work to minimize the debt per equity ratio with time but for Tata Motors, the above ratio kept going up as illustrated in the table below. This could be used to show that the company fared poorly in the market and it was not the best to invest in.
2013 Having negative ratios definitely translates into poor performance for any company under study and such represents the performance of Tata Motors Inc. The management politics in Tata Motors in the last year also affected the financial performance of the company. Mahindra group engages in producing automotive and farm business equipment around the world. It also provides aerospace components and spares for airframe and assemblies. Mahindra offers services for private and commercial appliances and equipment like the motor cycles and personal vehicles. Mahindra also provides crop care products such as hybrid seeds, dairy products and many others. Other dealings are both the childcare and maternity care products. this clearly indicates that the market is doing better than the enterprise in capital. It is therefore better to invest in a company that is doing well inside than in a company where the market is performing better than the company.
This works as a sign of future failure in the value for the company. Financial Highlights According to the financial statements for the quarter ending on 30th September 2018, the profit margin measured 8. 06% while the operating margin was 11. 68 M is available. This shows that the number shares are decreasing. This is due to the high competition posed by other companies like the FORD, Suzuki and others enjoying the international market. If the lease terms limit the extent of the shareholder’s responsibility to stand the unused amount defect to the quoted remaining value of the shares, the level of guarantee by the company to be highlighted in the minimum contract prices shall be limited to the stipulated maximum insufficiency where the investor is called to make up.
Precisely, the named figure is described as the utmost fault that the investor is needed to pay or make up. the sales growth is also paramount in this discussion where it decreases from the current 17. 80% to 10. 70 % in the next quarter of financial year. Below is a graph showing the initial performance of the company (Srinivasan, 2015). Conclusion Mahindra has been said to sell its products in USA in many occasions. "Bargaining over BITs, arbitrating awards: The regime for protection and promotion of international investment. " World Politics 66. Guthart, Gary S. , et al. "Nonforce reflecting method for providing tool force information to a user of a telesurgical system. "Remote power usage management for plug-in vehicles. " U. S. Patent No. 16 Dec. , and Scott Howard Gaboury.
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