To OTC Journal Members:
 

Titan General (OTC BB: TTGH)- Poised To Go Higher- News Could Be Fuel For Next Level

Titan General was out with news just after the close today. As you can see from the chart, the stock is trying to work higher, and today's news could be just the catalyst to take it to the next level. A 50% retracement of the drop from April would take us back up to the $1.75 level, which I believe will probably be the next stop.

I first featured the stock in a Trading Alert on August 26th. The stock closed at $1.20 that day, opened at $1.30, and has worked it's way up above $1.40. The company had announced it completed a merging of two facilities on the West Coast. Titan General expected to save about $1 million in annual costs. More importantly, Titan General informed us the new facility was only operating at about 30% of capacity. Therefore, the company has the infrastructure for rapid expansion. New business wins should translate into bottom line dollars in the near term.

Today the company announced significant new business wins, which is exactly what the doctor ordered for the stock to trade to higher levels. The company announced it had recently completed orders for 11 new customers. The new customers included Fortune 500 companies Textron and Pal Pilot. 

Two weeks ago the stock traded fairly high volume without making much upside progress on the price. Last week the stock began to "drift up" on lighter volume, which suggests there may have been some overhead supply which has since been cleaned out. Technically speaking, this means the stock could be poised to move higher.

News out of the tech sector was very robust last week. The SOX (semiconductor) index is trading at an 18 month high. As I mentioned in the weekend edition, Intel raised earnings estimates last week, and National Semi Conductor reported blockbuster sales and earnings.

If the semi conductor manufacturers are picking up steam, other electronics manufacturers will not be far behind with new product offerings. Companies like Titan General should experience accelerating growth as manufacturers rush to get new electronic products into the marketplace. 

Titan General provides services in a very unique market niche. The company fabricates PCB's (Printed Circuit Boards) and turns them around in 48 to 72 hours for electronics manufacturers working on new product designs. This highly specialized service has very high margins.

Based on last quarter's financial results, the company is enjoying about $13 million in annual revenues with a 40% annual growth rate. If the growth rate continues at the past clip, enhanced sales along with decreased overhead should put Titan General in the black in short order.

I'm sticking with my original target of $2 by the end of October. A couple more announcements like this one will make me look like I know what I'm doing, at least for today.

Here is the complete text of today's news release for your review:
 

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