NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- TENARIS SA has improved earnings per share by 45.9% 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 $1.91 versus $1.99 in the prior year. This year, the market expects an improvement in earnings ($2.52 versus $1.91).
- Powered by its strong earnings growth of 45.94% and other important driving factors, this stock has surged by 26.31% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- TS's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.28, which illustrates the ability to avoid short-term cash problems.
- Despite its growing revenue, the company underperformed as compared with the industry average of 46.7%. Since the same quarter one year prior, revenues rose by 41.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Energy Equipment & Services industry average. The net income increased by 45.5% when compared to the same quarter one year prior, rising from $219.55 million to $319.37 million.
Tenaris S.A., through its subsidiaries, engages in the manufacture and sale of steel pipe products. The company has a P/E ratio of 25.1, above the average metals & mining industry P/E ratio of 23 and above the S&P 500 P/E ratio of 17.7. Tenaris has a market cap of $28.3 billion and is part of the
industry. Shares are down 3.1% year to date as of the close of trading on Wednesday.
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