TOP IDEAS: Despite trading 200% higher,
Titan Logix (TSXV: TLA) stock provides value and opportunity for small cap
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.
Once a value stock buy, still a value stock
buy: This despite the fact that Titan Logix Corp. (TSXV: TLA - $1.35) shares trade
200% higher today.
It is almost 3 years ago since we published
our first blog post on Titan Logix (See: Titan
Logix: Fluid in value and growing rapidly) for Investorfile’s
Top Ideas – Small Cap Value Stocks. At that time the Company’s shares were
trading at $0.45. Today at $1.35, the same arguments from that blog post
hold true for buying this stock: Titan Logix’s growth prospects are strong and
the share price is inexpensive.
Titan Logix is an industrial technology
company focused on manufacturing and marketing of advanced fluid management
solutions. The Company's flagship product, Guided Wave Radar (GWR) gauges for
fluid level measurement and overfill prevention, are traditionally used by
crude oil tanker trucks but are also emerging in other fluid transport markets.
For fiscal 2014 the Company reported annual
revenues of $17.4 million, EBITDA of approximately $4 million and earnings per
share of $0.11. Titian Logix holds about $12 million in cash and is debt-free.
On a trailing twelve-month basis (TTM) the Company’s stock currently trades
about 5 times Enterprise Value (EV) to EBITDA. For a growth company this is a
low valuation multiple.
The Company prepared for its next stage of
growth by restructuring its management team in 2014 to facilitate new product
launches and to pursue strategic partnerships and acquisitions in 2015.
Organically, growth has been driven by
increasing market penetration of the Company’s products. Full commercial
production has commenced for new products such as the Finch II™ display/controller,
designed for use with the Titan TD80™ gauge for mobile crude oil tankers. This
new product has received very favourable customer reviews and therefore sales
The Company’s products are also
experiencing increasing demand in new markets. Aviation, used oil and chemical
mobile tankers have started to show acceptance of Titan’s new fluid level
measurement products ("Stiks”). In 2015, the Company plans to commercially
launch its new and advanced fluid gauging and control system for refined fuel
tankers, a significantly large and new market opportunity.
With all that said above, for those small
cap investors who do not own stock in Titan Logix, the opportunity to invest is
not lost just yet. Fortunately the Company shares are still value-priced, but
not for long if Titan Logix realizes on its outlook of growing revenues and a potential
acquisition in 2015.
Titan Logix has approximately 25 million
Titan Logix’s website www.titanlogix.com
Author Ownership Disclosure: TSXV: TLA- Yes
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.