Steel week continues today with Tenaris (TS).  Tenaris is based in Luxembourg, and it is a large international company.  It has a modest 1.9% annual dividend, which is fully sustainable based on cash flow.  Tenaris' investment return and profitability measures are within the range of a healthy stock, and its key price ratios average to less than 10.00.  TS has a current price per share of $45.93, with a 52-week range of $41.05 to $54.82.

The charts indicate this stock has trended up over the last few years, with 2007 dominated by wave-like volatility.  This is good news, because right now TS is at the low end of the wave.  Based on the charts, it is reasonable to conclude this stock will soon go up again.  However, from news articles within the last two months, the picture is painted differently.  Third quarter earnings were reported down, which drove down the price due to a large selloff.

Good fundamentals mixed with bad news makes for a very confusing decision.  Is the company really doing as well as the numbers say?  Conversely, is it really as bad as the news indicates?  Tenaris is a steel company with international business and over 27 billion dollars in market capital, so it's not going to collapse from a lackluster quarter.  Still, the speculative aspect of this stock's price is likely to dominate in projections, rather than its physical aspect, because there was a recent strong reaction to its 3rd quarter report.  The most common-sense reaction in a case like this is to hold off and wait for 4th quarter news.  When the 4th quarter reports come out, this stock is headed for another sharp change.

The fundamentals indicate a healthy company; the numbers are above the common average for manufacturing-type stocks.  The news has been less than good.  I will leave it up to you to decide whether you think TS is headed for a nosedive or a spike.  All I am sure of is that it will be one or the other, sometime early next February.