Tenaris S.A. (TS) A Stock to Buy on Insider Confidence?

The Tenaris S.A. (NYSE:TS) bears won the day, but the reality is that the -0.95 points or -3.9 percent decline gave very little definitive technical indication of where the stock could be headed next. On 06 December, the shares traded at $23.43 with a heavy trade volume of 3.834 million shares. After opening the session at $23.64, the shares went as high as $23.8 and as low as $23.155, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $14 billion and now has 597.27 million shares outstanding. Tenaris S.A. (TS) stock has lost -23.83 percent of market value in 21 trading days.

TS stock has a trailing 3-year beta of 0.68, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.37 a share in the trailing twelve months. The stock’s value has fallen -26.46 percent year to date (YTD) against a decline of -20.82 percent in 12 month’s time. The company’s shares still trade -42.35 percent away from its 1-year high of $40.64 and -2.21 percent down from 52-week low of $23.96. The average consensus rating on the company is 2.2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Tenaris S.A. (TS) will probably climb 71.45 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $57-month high price target. This represents a whopping 143.28 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $39.41, which represents a return potential of 68.2 percent when compared to the closing price of the stock of $23.43 on Thursday, December 06. The lowest price target for the stock is $27 — slightly more than 15.24 percent from TS’s current share price.

History has shown that shares in Tenaris S.A. have gone down on 10 different earnings reaction days and are predicted to add 0.04 percent when the company reports upcoming earnings. Investors will get their next glimpse of TS’s Q4 earnings on February 20. Analysts are forecasting revenue to climb 30 percent to $2.07B in the fiscal fourth quarter, while earnings are seen soaring by nearly 55.56 percent to $0.42 per share. It earned $0.42 per share, better than the $0.35, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.9B, better than the $1.83B analysts expected. Earnings are estimated to increase by 88.3 percent this year, 22.1 percent next year and continue to increase by 38.3 percent annually for the next 5 years.

The stock is currently hovering around the first support level of $23.12. Below this, the next support is placed in the zone of $22.82. Till the time, the TS stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 29.58 on daily chart, which may remain a cause for comfort. If the price breaks below $22.82 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $23.77 mark may result into a pull-back move towards $24.11 level.

Shares of Tenaris S.A. (TS) are trading at a P/E ratio of 75.3 times earnings reported for the past 12 months. The industry TS operates in has an average P/E of 129.24. Its P/E ratio went as low as 14.56X and as high as 1518.28 over the 5-year span.Further, it is sporting a 1.96 on the Price-to-Sales ratio. Compare this with the industry average P/S of 2.32. 31.2 percent is the gross profit margin for Tenaris S.A. and operating margin sits at 12.1 percent. Along with this, the net profit margin is 11.3 percent.