Gavin Graham Tenaris SA TS-N SELL Mar 20, 2006

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%

Tenaris S.A. is a global manufacturer and supplier of steel pipes and related services, primarily for the energy industry.

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%     

Our PAST TOP PICK with TS is stalling.  To remain disciplined, we recommend trailing up the stop (from $28) to $30 at this time.

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%

Our PAST TOP PICK with TS is progressing well.  To remain disciplined, we recommend trailing up the stop (from $30) to $34 at this time.

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%.