This was a brutal quarter for auto, truck, and commercial vehicle suppliers, as auto production dropped around 45%, and suppliers scrambled to cut costs and preserve liquidity ahead of an expected rebound later this year. Tenneco (TEN) managed to post better-than-expected results, and the company’s survival seems less tenuous now, but overall performance was still nothing to celebrate.
I’d written in the past that Tenneco was a high-risk binary situation where investors were either going to win big or lose big. Since my last update, the shares are up more than 50% on what I believe is greater optimism about the auto end market in general and Tenneco’s liquidity situation, in particular. Although I still see potential upside from here, I continue to have serious doubts as to whether this company is structured to do more than just survive and shuffle along.
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