Reaserch

ITC has underperformed despite positive sentiment. Is the market right in punishing the stock?


Image credit: ITC

Synopsis

Since 2014, the ITC stock has been a laggard. But things are changing post the company’s huge investment in the non-tobacco category. There is a renewed investor interest claiming it to be a value buy, but the stock is still underperforming. Has the company got its capital allocation right? We did a thought experiment and found this.

“When we control a company we get to allocate capital, whereas we are likely to have little or nothing to say about this process with marketable holdings. This point can be important because the heads of many companies are not skilled in capital allocation.”—Warren BuffettAmerican Express, RJR Nabisco, and ITC – what connects the three? They are guilty of what Buffett has called a management sin in his annual letters. American Express CEO James

  • GIFT ARTICLE
  • FONT SIZE
  • SAVE
  • PRINT
  • COMMENT

Sign in to read the full article

You’ve got this Prime Story as a Free Gift

Already a Member?

Special Offer

Get Flat 20% Off

ON ET PRIME MEMBERSHIP

Get Offer

Why ?

  • Exclusive Economic Times Stories, Editorials & Expert opinion across 20+ sectors

  • Stock analysis. Market Research. Industry Trends on 4000+ Stocks

  • Clean experience with
    Minimal Ads

  • Comment & Engage with ET Prime community

  • Exclusive invites to Virtual Events with Industry Leaders

  • A trusted team of Journalists & Analysts who can best filter signal from noise

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *