To OTC Journal Members:
 

Titan Global (OTC BB: TTGL): Delivering Big On Top Line

I haven't published much on Titan Global of late as the company has not had much to say. However, today post close, the company delivered some vital information near and dear to the hearts of investors, and this revelation should get the stock climbing the charts once again.

This news could not come at a better time, as the stock is within a few cents of an ideal entry level (I'll show you below). If the stock doesn't come flying out of the gates in the AM, you might get a shot at grabbing this one at an absolutely ideal short term entry level.

TTGL is purely a numbers idea. There is no pie in the sky story here. If they keep delivering the kind of growth they have from Q1 to Q2, profitability in a big way is inevitable, and a much higher market valuation is coming at some time in the future. Like CPNE, fund managers will eventually discover this one, and the stock will take on a new life.

We learned today TTGL will deliver $36 million in revs in fiscal Q2 (DEC, JAN, FEB). That's up from $30 million in Q1, and represents 20% quarter over quarter growth. At this rate, they will eclipse the $50 million mark in two quarters.

If margins stay the same, they should generate about $4 million in gross profits, and will certainly be cash flow positive in Q2- they might even deliver their first EPS.

As a reminder- TTGL has two divisions- 1st- the telecom side. They sell 35 million prepaid phone cards annually just like the one you see pictured here. Their market is the enormous population of 1st generation Americans who make calls south of the border. They are ingeniously converting prepaid card holders into hand held subscribers with little customer acquisition cost- margins will improve.

Part 2- the printed circuit board company. They plan to spin it out into a separate publicly traded company. It will be a stock dividend- as a shareholder, you will get the dividend. It's a two for one special.

I'm going to make this short and sweet. TTGL delivered $30 million in Q1. They announced today post close they will deliver $36 million in Q2- at this rate it will be $50 million in two quarters. That's $200 million in annual revs.

On the profit side- they lost $6.9 million in Q1. $5.75 million were booked because their stock price went up. It was an expense related to derivatives. Go figure. These new GAAP standards can be pretty misleading and draconian. 

Since their Jan 1 refinance allowed them to cancel a number of their derivatives, those former non cash expenses will be gone, and might even come back as gains. The bottom line- it wouldn't surprise me if TTGL announced their first profitable quarter in Q2 of '07.

In the interim- fully diluted there are 56 million I&O- at $1.20 you are looking at a market value of $67.2 million- absurd for a company headed for profitability and $200 million in annual sales. 

Here's a very busy chart, but there is a lot to cover, and I thought you might want to see it all. The most important feature- the nearly perfect 61.8% retracement of the 2007 move. The level is $1.13, and the stock closed at $1.18 today. 

Second feature. Look at the bottom of the chart where you see the declining volume. The volume has dried up considerably. When you see the volume dry up like this, it generally means the stock is poised to rebound easily on moderate volume.

The third feature of this chart which lends itself to much higher levels is the horizontal line at $1.40. The stock butted up against $1.40 before finally breaking through a couple of weeks ago. The next time it hits $1.40, it should move through very smoothly.

In short, I'm very confident pounding the proverbial table on this one at $1.20- you might lock it in if you act quickly on the open. Don't worry about $1.25 or even $1.30- still plenty of upside to go around.

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

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