As part of our ongoing series here at The Acquirer’s Multiple, we provide this feature article titled ‘Stock in Focus‘ where we focus on one of the stocks from our Stock Screeners.
One of the cheapest stocks in our Stock Screeners is Ternium SA (NYSE: TX).
Ternium SA is a flat steel producer operating in Mexico, Brazil, Argentina, Colombia, the southern United States, and Central America. It produces finished and semi-finished steel products and iron ore, which are sold either directly to steel manufacturers and steel processors or end-users. The company operates in two segments: Steel and Mining. In its steel segment, the company produces slabs, billets & round bars, hot-rolled coils & sheets, bars & stirrups, wire rods, steel pipes, and other products. The Mining segment sells iron ore as concentrates (fines) and pellets. The vast majority of its revenue comes from the steel segment. Its geographical segments are Mexico, the Southern region, and Brazil & Other markets.
A quick look at the share price history for Ternium SA (below) over the past twelve months shows that the price is up 91%. Here’s why the company is undervalued.
Market Cap: $7.12 Billion
Enterprise Value: $8.88 Billion
Operating Earnings: $1.61 Billion
Acquirer’s Multiple: 5.5
Free Cash Flow (TTM)
Free Cash Flow: $1.21 Billion
FCF/EV Yield: 14%
Piotroski F-Score: 9
Altman Z-Score: 3.39
Beneish M-Score: -2.38
Shareholder Yield: 6%
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