TNRSF - Why Tenaris Is Significantly Undervalued
2024-06-25 09:42:05 ET
Summary
- Tenaris SA is a leading manufacturer of steel pipes for the energy industry, with facilities using electric arc furnaces for production.
- The company operates globally, with a focus on the oil and gas segment, deriving most revenue from the U.S. and Argentina.
- High barriers to entry, low concentration, and volatile revenue characterize the steel pipe industry, with substitutes mainly coming from international imports.
Tenaris SA ( TS ) is a leading manufacturer of a full range of steel pipes and related services for the world's energy industry and certain other industrial applications. All of its manufacturing facilities use electric arc furnaces, where the feedstock is predominantly steel scrap and is less energy-intensive than the basic oxygen furnace method. Electric arc furnaces are also less greenhouse gas-intensive and typically more productive with less overhead costs. Only 4% of steel pipe costs for Tenaris are due to direct energy (86% of which is supplied from local electricity grids), whilst 23% are derived from steel scrap costs....
Why Tenaris Is Significantly Undervalued