Opinions
The Weekly Buzzing Stocks by Billy Kawasaki
Tenaris SA
TS-N
TOP PICK
Aug 17, 2023
Stock price when the opinion was issued
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This international producer of steel for the energy industry recently reported a 75% increase in Q1 sales. It trades at 6x earnings, 1.4x book value and supports a ROE of 22%. Cash reserves are growing, while debt is retired. We recommend placing a stop-loss at $26, looking to achieve $42 -- upside potential of 27%. Yield 1.5%
(Analysts’ price target is $42.62)With recently reported earnings improving sharply, we reiterate this steel and pipe supplier to the oil and gas sector as a TOP PICK. Net income and EPS was nearly double that of the first half of 2022. Free cash flow reached a record $1.2 billion. It trades at 7x earnings, 1.2x book and supports a 25% ROE. We recommend trailing up the stop (from $26) to $28, looking to achieve $42 -- upside potential over 25%. Yield 1.0%
(Analysts’ price target is $42.53)We reiterate this international pipeline manufacturer as a TOP PICK. The company recently reported quarterly free cash flow of $1.1 billion, a 33% increase in operating income, and announced it will buy back more shares. It trades at 8x earnings, 1.2x book and supports a 24% ROE. We continue to recommend a stop at $30, looking to achieve $42 -- upside potential of 21%. Yield 1.6%
(Analysts’ price target is $41.80)Our PAST TOP PICK with TS has triggered its stop at $34. To remain disciplined, we recommend covering the position at this time. When combined with our previous recommendations, this will result in a net investment loss of 3%.
Tenaris S.A. is a global manufacturer and supplier of steel pipes and related services, primarily for the energy industry.