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 Tenneco Inc. Class A 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
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.