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Investing in Argentina and Argentina Stocks

Discusses *smart* ways of investing in Argentina, primarily thru ADRs on NYSE and NASDAQ. Covers companies like Grupo Galicia, GGAL, Banco Frances, BFR, IRSA(the biggest Real Estate Company in Argentina) IRS, Tenaris (TS), etc. UPDATED SEVERAL TIMES A MONTH.

Monday, May 08, 2006

Tenaris (NYSE: :TS)-The Argentina Heavyweight Keeps Rolling

Tenaris, NYSE:TS, is THE top dog of the Argentine Market. It alone makes up 27% of the Merval, the Argentine Benchmark Index. Let's profile this company a bit, and see why it has been on a tear lately.

One of the most prestigious groups in Argentina is the Techint Group. From their website, The Group has over 100 companies with 34,200 permanent employees, with yearly revenues of US$11.3B. Tenaris is the star of Techint-it is a leading manufacturer of seamless steel pipe products and provider of pipe handling, stocking and distribution services to the world's oil and gas, energy, structural and mechanical industries. See more on Techint and Tenaris at their website here.

With the rocketing Oil Prices and related stocks, Tenaris, which is the No. 1 provider of seamless pipe products to the Oil and Gas Industry, has also got its share: seen its stock almost triple in the last year. See Tenaris New York Chart here. The Company is listed on Buenos Aires, Mexico and Milan Exchanges. The market cap of Tenaris is about US$25B. This is an Argentine company which is a leader in it's sector-something hard to believe after the low repute this country has with everyone. In the latest quarter, revenues jumped up 30% and EPS jumped more than 50%. The company is wallowing in cash-for a capital intensive industry like this, such numbers are unheard of. Execution remains great, and unless their is a collapse in the oil prices and oil exploration budgets, the company's position in the world remains unenviable. See full latest earnings release here.

More companies from Argentina will be heard of on the world scene as this country recovers-the recovery this time is not based on some artificial financial manipulation by the Government (in the 90s, when the Peso was pegged 1:1 with the Greenback), but on real progress in the Efficiency and Productivity profile of the country. Having lived in Argentina for the past three years, I can tell you from personal experience that the inefficiency and bureaucracy levels are going down, and Argentina is catching up with the rest of the world. While the recovery here might not be as spectacular as the recovery of Russia after the Rouble collapsed in 1998, there is little doubt that overall, the country is on the right track. And Tenaris is the crowning jewel example of this.

Sanjay John G.

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