This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

December 3, 2010 - Tata Motors Ltd. (TTM-NYSE) is an automobile company. It manufactures and sells commercial and passenger vehicles primarily in India. The company offers cars, utility vehicles, trucks, buses, and defense vehicles, as well as develops electric and hybrid vehicles for personal and public transportation.

It sells and services through its dealership, sales, services, and spare parts network. The company also markets its commercial and passenger vehicles in Europe, Africa, the Middle East, South East Asia, South Asia, and South America. The company was formerly known as Tata Engineering and Locomotive Company Limited and changed its name to Tata Motors Limited in July 2003. Tata Motors Limited was founded in 1945 and is based in Mumbai, India.

You may not know Tata Motors but you know some of its cars: Jaguar/Land Rover is the most recognized name (it bought Jaguar from Ford in June of 2008), but it also owns Hispano Corrocera and Daewoo Commercial Vehicles. In India its best known for the Tata Nano, a car that sells for about $2500 and had 100,000 orders before it was first built. However, last month the car sold only 589 units as it's getting some bad publicity from the fact that several have burst into flame.

Sales should follow the same path. In 2007, they were $8.815 billion. This year, expect $25.750 billion, then $27.7 billion next year.

When management bought Jaguar/Land Rover in 2008, many investors bailed, figuring if Ford couldn't make a profit, how could any one else. The investors who stuck with TTM through the acquisition and the market meltdown are now seeing the benefits of their decision. The latest Jaguar and Rovers are getting very positive press with some magazine editors saying the latest offerings are the best Jaguar has ever produced. Sales of luxury cars in general are on the rise. The Jag/LR division showed a profit of almost $385 million in the second quarter of this fiscal year. And that's with a rather weak economy. Imagine the profits that lie ahead when the global economy really gains traction.

Management has noticed Jaguar's success and is willing to invest $1.5 billion annuallly over the next few years. It's keeping open a previously slated- for-closure plant in England and is currently in talks to establish a joint venture in China to penetrate the hottest car market in the world. It's also talking with Ford about supplying engines because demand for the new Jag is beyond anticipation.

But the entire focus isn't on Jaguar. The Nano business is important. Many Indian buyers are motorcycle and bicycle owners, and they want an affordable car. (It's only available in India.) The Nano gives them that. But reliability has become an issue that needs to be fixed before sales can ramp again. Commercial vehicles are also important. Margins, however, in these two divisions are no where near what Jaguar/LR provide.

More numbers: Price to sales ratio is .73. Price to book is 9.91. Operating margin for the last 12 months was 9.22% and Profit margin was 6.40%. There's $1.93 billion in cash for $3.39 a share. Total debt is $7.95 billion. Debt to equity is 2.93. Current ratio is 1.12. Book value per share is $3.13. Beta is a heart stopping 2.40. The stock is up almost 100% in the last 52 weeks compared to the S&P 500 index which is up only 8.73%. The all-time high was recely reached on November 26 at $37.65. There are 570.56 million shares outstanding with a Float of 373.04 million. There is a 30 cent annual dividend for a yield of .9%. It is paid once a year in September.

Tata Motors takes a strong, risk oriented investor at this point. Aggressive investors will like the potential Jaguar/LR offers, especially since they're not fully marketed in China as yet. The profit margins are exceptional. But there are other parts of Tata that don't put as much to the bottom line, and they've been driving the company for some time. With a few Nanos featured in flames on the front pages of newspapers, the company needs to work on its image and safety of the cars. This is a strong company with a solid history of success. It could just be the beginning of a very bright future for Tata, filled with earnings.

- Company Web site: www.tatamotors.com

- Ted Allrich