Tenaris SA (TS): Today's Featured Basic Materials Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Tenaris ( TS) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.3%. By the end of trading, Tenaris fell 69 cents (-1.8%) to $38.78 on light volume. Throughout the day, 1.1 million shares of Tenaris exchanged hands as compared to its average daily volume of 1.5 million shares. The stock ranged in price between $38.61-$39.21 after having opened the day at $39.06 as compared to the previous trading day's close of $39.47. Other companies within the Basic Materials sector that declined today were: Metabolix ( MBLX), down 16.7%, GeoGlobal Resources ( GGR), down 11.9%, Sonde Resources ( SOQ), down 7.8%, and Minco Gold Corporation ( MGH), down 7.1%.
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Tenaris S.A., through its subsidiaries, engages in the manufacture and sale of steel pipe products. Tenaris has a market cap of $23.5 billion and is part of the metals & mining industry. The company has a P/E ratio of 35.2, above the S&P 500 P/E ratio of 17.7. Shares are up 6.2% year to date as of the close of trading on Thursday. Currently there are six analysts that rate Tenaris a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates Tenaris as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

On the positive front, Recovery Energy ( RECV), up 21.3%, Ivanhoe Energy ( IVAN), up 18.1%, Dejour Energy ( DEJ), up 17.3%, and Lightbridge ( LTBR), up 17.1%, were all gainers within the basic materials sector with Petroleo Brasileiro SA Petrobras ( PBR.A) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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