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Price: Strong Profit Recovery for Tenneco

Real Money contributor Paul Price says auto parts maker Tenneco is a good long-term, if low-key, investment. Here's why.
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Investors can make profits even if a company never trades above a price-to-earnings ratio of 9, Paul Price wrote recently over on Real Money.

"Automotive equipment maker Tenneco  (TEN) - Get Free Report is in the midst of a strong profit recovery. Earnings per share for 2021 are now estimated at $3.78 or better, reversing an annual loss during COVID-ravaged 2020."

The 2022 estimates now focus of EPS bouncing back to nearly $5. TEN changed hands at $22.53 as recently as June 15. The stock closed at $15.39 on Thursday. Its shares exceeded $61 during each of the five years stretching from 2014 through 2018, Price notes

Get the details of his trading strategy and other investing insights from Price on Real Money. 

Price sees Tenneco as a good long-term investment. The company builds and designs parts for automobiles. This makes it exactly the kind of back-end/infrastructure play that Price likes. They aren’t trying to make the cars you buy. They want to make the parts that are inside the cars everyone buys. And that slow-and-steady approach has tended to make the company a quite successful, low-key investment.

Price says it's not a high flier: "Tenneco is a high-beta, less-than-blue-chip name. That doesn't mean you can't make money on it."

Price sees lots of ways to invest in this stock. Whether you’re simply jumping in on a series of purchases, or building a solid options play around the company, he thinks there’s a lot of potential here.

Get more trading strategies and investing insights from the contributors on Real Money.