TOP IDEAS: Titan Logix (TSXV: TLA) sees renewed sales
momentum in traditional crude oil markets while introducing new business
controls solutions for revenue diversification.
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.
Titan Logix Corp. (TSXV: TLA - C$0.57) was down but never
out as the Company’s turnaround takes hold.
It is hard to believe that since the collapse of world
oil prices several years ago and the massive spending cuts that followed by the
oil and gas-related industries (Titan Logix’s main market), the Company could
survive. Well, it did, mainly due to its very strong balance sheet.
It has been a little over a year ago since we last provided
an update on Titan Logix (See: Time to
revisit Titan Logix, a cash-rich small cap stock with an upside). At
that time, the Investorfile blog was of the opinion that Titan Logix was now
beyond survival mode. We also suggested in that post that the Company
could show a profit from operations in the latter half of fiscal 2018.
It turns out we may be right!
Titan Logix is an industrial technology company focused on
the manufacturing and marketing of advanced fluid management solutions. The
Company's flagship products, the Finch II™ display/controller, designed for use
with the Titan TD80™ - a Guided Wave Radar (GWR) gauge for mobile crude oil
tankers - is the market leader for electronic fluid level measurement and
overfill prevention products in North America.
Over the summer, the Company released its fiscal 2018 Q3
financial results and, as we expected, Titan Logix is no longer losing
money.The Company reported net earnings of $105 thousand for the quarter,
which was primarily a result of the increase in revenue and gross profit
combined with an increase in finance income.
In Q4 we expect the financial results will improve further.
Why? Company Management has confirmed the demand for new crude oil road tankers
in North America (the Company’s traditional
market) is ramping up and that Titan’s flagship GWR products have
maintained their strong market share. This means sales are poised to accelerate
and so will profits moving forward.
What is also accelerating is the Company’s vision to
diversify its revenue streams by being a data generation and collection
facilitator using its GWR instruments. The Company has said that it has
partnered with a software provider for the world’s first cloud-based solution
for supply chain management of produced water, resulting from fracking
operations. Management believes that the expanded vision of becoming a
data generation and collection specialist has opened market opportunities to
tap into the wave of data mining and analytics for business control solutions
in new verticals, outside of the crude oil industry.
Since our last blog post, our investment thesis on Titan
Logix remains firmly intact: There is little downside (and plenty of
potential upside) in owning this stock. We want to point out that as May 31,
2018, the Company had about C$12.9 million in cash and secured loan investments
(C$0.45/per share) and is debt-free. This implies (at today’s stock price of
C$0.57) that Titan’s business has a market value of only C$3.4 million, which
is a bargain basement price. That said, and given our forecast that the
Company’s operations are returning to profitability, we are still encouraging
small cap value investors accumulate stock to a high of C$0.75 per share. The
caveat this time is that the potential upside is greater now!
Titan Logix has approximately 28.5 million shares
The Company’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
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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.