Water-Logged And Getting Wetter: Tenaris (TS)
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Tenaris (TS) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Tenaris as such a stock due to the following factors:
- TS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.8 million.
- TS has traded 380,727 shares today.
- TS traded in a range 211.6% of the normal price range with a price range of $1.09.
- TS traded below its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.EXCLUSIVE OFFER: Get the inside scoop on opportunities in TS with the Ticky from Trade-Ideas. See the FREE profile for TS NOW at Trade-IdeasMore details on TS: Tenaris S.A., through its subsidiaries, is engaged in the steel pipe manufacturing and distribution activities. The stock currently has a dividend yield of 2%. TS has a PE ratio of 14.8. Currently there are 3 analysts that rate Tenaris a buy, 1 analyst rates it a sell, and 6 rate it a hold.The average volume for Tenaris has been 1.2 million shares per day over the past 30 days. Tenaris has a market cap of $26.5 billion and is part of the industrial goods sector and industrial industry. Shares are up 2.9% year-to-date as of the close of trading on Friday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Tenaris as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.Highlights from the ratings report include:
- TS's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, TS has a quick ratio of 1.83, which demonstrates the ability of the company to cover short-term liquidity needs.
- 44.18% is the gross profit margin for TENARIS SA which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.28% is above that of the industry average.
- Net operating cash flow has increased to $427.48 million or 23.33% when compared to the same quarter last year. Despite an increase in cash flow, TENARIS SA's cash flow growth rate is still lower than the industry average growth rate of 49.45%.
- TENARIS SA has improved earnings per share by 9.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TENARIS SA reported lower earnings of $2.62 versus $2.88 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $2.62).
- TS, with its decline in revenue, underperformed when compared the industry average of 9.2%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full Tenaris Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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