 TOP IDEAS: Titan Logix’s (TSXV: TLA) stock price is up
but not unsustainable.
Note: Investorfile’s share price accumulation target of
$0.75 for Titan Logix Corp. was reached on February 5, 2013. For the record, we
do not revise share price targets for our Top Ideas – Small Cap Value Stocks.
We have positioned our blog to be one of the first providers for a pragmatic
perspective of a small cap company stock’s potential worth, where there may be
uncovered value that has been largely overlooked by the investment community.
To date in 2013, Titan Logix Corp. (TSXV: TLA -$1.23)
stock is up 98%. Even better, the Company’s shares have risen in value by 227% at its peak, since we first recommended the purchase of Titan Logix stock as
one of our Top Ideas for value-driven small cap investors less than two years
ago (See: Titan Logix: Fluid in value and growing rapidly). No doubt owning
shares of this Company has been a rewarding small cap investment.
Today, just like last fiscal year, management at Titan
Logix’s intent is to build shareholder value for the long term with development
of its fluid management solutions to control and secure fluid assets in mobile,
stationary tanks and process vessels. Titan’s TD80/Stik Guided Wave Radar fluid
level gauging technologies for new road tankers built in North America has been
the backbone for the Company’s growth. Titan Logix continues to focus on market
penetration, retrofit sales in oil tanker markets and diversification through
development and sales of their new products in other fluid management markets
including used oil collection, aviation refueling and chemical distribution.
Since our last blog post on Titan Logix in February of
this year (See: Titan Logix is building value for the long-term) the small cap
market performance has been very strong. In conjunction with this market’s
resurgence are lofty and possibly unsustainable share price valuations for many
high-flying small cap stocks. Given its share value appreciation will Titan
Logix’s stock price become very unpredictable like one of those high-flying
small cap stocks?
Our answer is: NO.
Here’s why:
Titan Logix has been profitable for 13 consecutive
quarters, long before the small cap market began its rapid recovery. Therefore
the Company’s share price appreciation is a reflection of its consistently
strong financial results and not solely on the bullish small cap market
sentiment.
The Company recently reported EBITDA of $4.45 million, and
earnings per share (EPS) of $0.13, its financial results for fiscal 2013.
Currently, Titan Logix shares trade under 5 times enterprise value (EV) to
EBITDA and less than 10 times earnings. Those are both still conservative stock
valuation ratios for a small cap technology company.
The balance sheet of Titan Logix is very strong. The
Company holds over $9.4 million in cash and has no debt. Titan Logix has the
financial flexibility to fund its future growth and does not need to rely on
the fortune of capital markets solely to do so.
In summary, we feel Titan Logix is well-positioned to
continue to make sustained progress on the development and deployment of
advanced technology fluid management systems. If so, the Company’s stock
valuation is still in a position to make sustainable appreciation.
Titan Logix has approximately 25 million shares
outstanding.
Titan Logix’s website www.titanlogix.com
Author Ownership Disclosure: TSXV: TLA- Yes
Read Disclaimer:
This article is for informational purposes only. This
article is based on the author's independent analysis and judgment and does not
guarantee the information's accuracy or completeness. The information contained
in this article is subject to change without notice, and the author assumes no
responsibility to update the information contained in this article. The
information contained within this article should not be construed as offering
of investment advice. Those seeking direct investment advice, should consult a
qualified, registered, investment professional. This is not a direct or implied
solicitation to buy or sell securities. Readers are advised to conduct their
own due diligence prior to considering buying or selling any stock.
Investorfile.com is not engaged in an investor relations
agreement with Titan Logix Corp. nor has it received any compensation from
Titan Logix Corp. for the preparation or distribution of this article.
The author of this article has acquired and may trade
shares of Titan Logix Corp. through open market transactions and for investment
purposes only. |
