Thursday, February 24, 2011

Stock Idea: Tenaris S.A. (TS, $44.37)

(May 16, 2011 update: All future stock posts will appear on my new subscription-only website at www.GoodfellowLLC.com. Please visit!)

Tenaris S.A. (TS)
serves oil, gas and engineering companies by providing welded steel pipes, rods, equipment and raw materials. The stock is down a bit this week based on Libyan unrest, yet CEO Rocca said, "the region generates about 2% to 3% of overall sales, so the financial impact will be limited." Read more at FoxBusiness.

Consensus earnings per share (eps) are projected to increase 46% and 26% for fiscal years 2011 and 2012. The PE is 15.8 based on 2011 eps, which is rather low vs. the earnings growth, and the dividend of $0.68 yields 1.53%.

Tenaris stock crashed from a high around $71 right before the financial meltdown of 2008 to a low around $18. The share price has been recovering steadily for two years now. Traders should be prepared to buy at $43 and sell as it retraces a recent move above $49.


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