Seeking Alpha: Slowing Growth Weighing On Tenneco

There has definitely been a split between the "have's" and "have not's" in the world of auto/truck parts and components. Companies like BorgWarner (NYSE:BWA), Dana (NYSE:DAN), and Cummins (NYSE:CMI) have been pretty unimpressive over the past year, while the likes of TRW (NYSE:TRW), Lear (NYSE:LEA), and American Axle (NYSE:AXL) have done quite well. With slowing growth across the last four quarterly reports, worries about a slowdown in North American and European demand, and weakness in commercial vehicle markets, it's not entirely surprising that Tenneco (NYSE:TEN) has found itself in the "have not" list of performers over the past year.

One of the challenges for Tenneco has been what has seemed like a constant "push to the right" with management's growth and margin improvement expectations. While Tenneco has been growing, and growing faster than underlying industry production rates, and posting better margins, the progress hasn't come fast enough to suit many analysts and investors. I was lukewarm on the stock a year ago, and I still am today. I like BorgWarner and Cummins better as long-term growth stories, but it's worth noting that Tenneco does look undervalued on what I think is a reasonably conservative DCF outlook (a rarity for auto/truck components companies) and would do likely well if off-road CV demand and/or forex headwinds were to come in better than expected.

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Slowing Growth Weighing On Tenneco