Our first recommendation is a buy on an auto parts manufacturer who beat earnings estimates by $0.25 last quarter. Our second is a sell, based on a ratings downgrade and a price recovery.
Tenneco Inc. (TEN)
From AlphaProfit Sector Investors’ Newsletter
Tenneco Inc. (TEN) shares are a play on tightening emission & ride control standards for light vehicles worldwide.
The auto part maker’s operating cash flow rose 52% in 2015 as margin widened for the sixth straight year. Tenneco expects new product launches to contribute to 5% growth in 2016 revenue. Revenue growth should pickup in 2017 and 2018 as new regulations phase in. Tenneco shares suit risk-tolerant investors seeking growth-at-a-reasonable-price.
The shares trade at 8.9-times analysts’ 2016 EPS forecast versus prospects for 13% EPS growth. (Next earnings: April 26)
Sam Subramanian, PhD, AlphaProfit Sector Investors’ Newsletter, www.alphaprofit.com, 281-565-6963, March 2016