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Is Titan Trading Cheap After the Recent Correction?
Aug 19, 2019

My cousin bought shares of Titan Company two days before the latest Budget, when the stock was trading close to its all-time high price.

In today's chart of the day, I have plotted the trend in the company's consolidated trailing twelve-month price to earnings (P/E) ratio over the last six years.

The price to earnings ratio is a valuation metric that tells us how the company's share is priced relative to its earnings.

Over the last six years, the P/E ratio of Titan Company has risen steadily.

From being under 30 times in August 2013, the P/E ratio was as high as 82 times when my cousin bought the stock. During the same period, the company's share price had expanded over 450%.

Even after the recent drop in the share price of Titan, the P/E ratio is 66 times - still higher than the average P/E ratio of 52 times during the six-year period.

My cousin is currently sitting on a notional loss of about 20% on her Titan investment. Will she recover her investment and make a profit?

Time will tell...

Data Source: Ace Equity

This Chart Of The Day was published in The 5 Minute WrapUp - The Titan Share Price Fall Becomes My Cousin's First Painful Lesson in Investing

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