Ternium Is Holding Up Better Than I Expected

Nov. 16, 2022 11:30 AM ETTernium S.A. (TX)12 Comments

Summary

  • Ternium is a Mexico and South America focused steel producer.
  • The margins are impacted by lower steel prices and a higher production cost.
  • Despite that disappointing mix, Ternium remains profitable and free cash flow positive.
  • I may restart writing out-of-the-money put options when it makes sense.
  • Looking for more investing ideas like this one? Get them exclusively at European Small-Cap Ideas. Learn More »
Two blast furnaces in a steel plant in North Rhine-Westphalia

Ruediger Fessel/iStock via Getty Images

Introduction

The steel market is a very cyclical market and producers and investors have to deal with potentially massive price swings. The entire sector enjoyed a massive tailwind in the post-COVID era but steel prices have come down by quite a

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This article was written by

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We zoom in on capital gains and dividend income in European small-caps
As I'm a long-term investor, I'll highlight some stockpicks which will have a 5-7 year investment horizon. As I strongly believe a portfolio should consist of a mixture of dividend-paying stocks and growth stocks, my articles will reflect my thoughts on this mixture.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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