As you can see, the stock has outperformed the market by a wide margin over the last one, three, five and 10 years. Because of its performance compared to the S&P 500 and the other 3,400 stocks that I track, this stock gets a performance grade of "A-".
Keep in mind that this stock was down a whopping 88% in 2008, however. For this reason, this is a high-risk type of stock.
This stock currently passes my very stringent performance test. Performance is great, but I don't like to buy stocks on that factor alone. Value is also a very important piece of the puzzle. I don't like to pay up for a stock. A combination of value and performance is essential to me. So let's look at this stock's current valuation:
Data from Best Stocks Now App
Tenneco is currently trading at 10.15 times forward earnings. Tenneco is selling at a very steep discount to its expected growth rate of 19.7%. This gives Tenneco a PEG ratio of 0.52.
I next take next year's earnings estimates of $4.46 and extrapolate them out over the next five years. Once I have done this, I apply a multiple that I feel is appropriate for the stock.
The five-year target price that I calculated from the company's earnings estimate is $90. The stock has an upside potential over the next five years is over 98%. I require 80% or more. This stock meets my requirements in my valuation criteria and gives this stock an "A-" value grade.
The last piece of the puzzle for me is the one-year stock chart. I don't like sideways trends. I want the stock to make up its mind first. I never buy downtrends. I am also very wary of extended uptrends like the one that Delphi currently sports.
As you can see from the chart above, the stock has recently broke out of a two-month consolidation and is a little bit extended right now. But, the valuation is extremely compelling right now. The stock has begun a new uptrend that will hopefully remain intact for a good long while.