Ternium S.A. (ADR) (NYSE:TX)

Fantastic fundamentals. Seems to be slightly better than stable, and recent drops appear to be unwarranted. They do appear to be short on cash (600 million, 2 billion in debt, but good management should rebuild that fairly quickly.

copying the CAPS leader

Termium itself seems like a solid company, but it's so dependent on Argentina where Cristina Kirchner is becoming more unglued as she follows Venezuelan strongman Hugo Chavez down the path of nationalization that I think it's only a matter of time before she turns her attention to the steel industry.

Insanely low p/e, solid dividend, manufacturing in a low-cost nation. Basic materials aren't recession-proof but are good inflation hedges (I think...)

12/15

High yield strategy: TMFHighYield says to look for "high dividend payers from the S&P 500 from diverse sectors, relatively low debt, and a history of increasing dividend payments." This is my Basic Materials pick.

Consistently profitable on a cash and accrual basis, low debt, and trades at 1.2x net tangible book value.

Latam is growing consistenly

pabrai

Steel Demand Set To Rise.

Hmmm, TX reminds me of the time I was looking to buy my first house. I found the perfect place, started getting everything ready to buy and then decided to hold off for a couple of years only to find out that the price went from 180k at the time I was going to buy to 730k only 4 years later. That is my story with TX, I had the buy order in the system to pick this beauty up for under $5. I had done my research and felt confident that this was a great place to tuck some money for a while...and then it happened.

I tend to share stock ideas with my coworkers, whom also share their thoughts. I like to help those in my office and we have a young kid fresh out of College. So I tossed the stock to him to do his valuation (he is actually quite good at this). But after his review he was telling me that he thought one of my other picks was a better deal. So we talked about it for a while and I decided to cancel the order and buy the new stock.

Well, while I am up 40% on the other company, it sure was not the 200%+ this one would have had. Ahh well, what's done is done and you can not change the past. So when my young co-worker (by the way I am only 10 years older then this kid) felt bad when he saw how TX was doing, I told him not to worry. It really was my decision to not buy TX at the time and it was not his fault at all. I considered his view and made my own decision as I rarely take others opions as solid and always do my own research also.

But to tell the truth after looking into this one again, I feel this one still has more movenment to be had on the way up and it has moved back into my buy list.

Price to sales of 0.2x.
Price to book of 0.37x.
Price to cash flow of 1.5x.

DIvidend yield of 5.9%, but since this is an ADR, a weakening dollar in the future makes this dividend even more valuable. Once the economy kicks into full gear, this stock will go up, and the value of the US Dollar will go back down.

VALUE, VALUE ADD MORE VALUE!

march,2009

Beaten down TX could get positive news on Wed. Jan. 28th
Venezuela negotiations with Ternium were to conclude within 15 days, that puts it at this Wed.

Venezuela may offer Ternium stake in steel maker
Tuesday January 13, 4:01 pm ET

Venezuela could offer Argentine-Italian conglomerate 10 percent stake in steel maker CARACAS, Venezuela (AP) -- Venezuela is mulling the possibility of offering Ternium SA a 10 percent stake in its largest steel maker. Ternium is a subsidiary of Argentine-Italian conglomerate Techint.

Venezuela nationalized the Sidor steel maker last year, but the government of President Hugo Chavez is still negotiating conspensation payment with Ternium, which owned 60 percent of Sidor.

Mining Minister Rodolfo Sanz said Tuesday that Venezuela could offer Ternium minority ownership of Sidor as part of payment.

Sanz said he expects negotiations with Ternium to conclude within 15 days.

Chavez has moved to nationalize key industries in Venezuela, including the South American country's largest telephone company, electric utilities and oil fields.

It's all over the news–Obama's proposed stimulus plan will meet little resistance. Once the billions allocated to infrastructure starts rolling in sentiment for stocks like TX will shift.

If the P/E is right this is a great long term hold.

Steadily increasing margins as the global buildout continues

My favorite kind of company -- industry with great growth prospects, P/E ratio below 10 and market cap in the 50-100 B range. Wonderful