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Titan Global
(OTC BB: TTGL): Camping on a Perfect Retracement |
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I rarely come out and say this so
emphatically, but I believe you should pick up shares of TTLG now
as long as it remains below $1.20. I'm always preaching to investors
about timing in your trades. Accumulate the stocks you like when they are
cheaper, quieter, trading low volume, and no one wants them.
Here's the big news on TTGL
today- there isn't any. That's why you should pick it up today. This is
a great idea if you like undervalued companies with improving fundamentals
and improving stock prices.
TTGL is not a growth story.
It doesn't need to be. It's a shrinking story. You don't have to rely on
growth to make money in TTGL. It's all about the expenses decreasing
which will lead to greater profitability.
After all, TTGL generated
$30
million in revenues last quarter alone- that's a $120 million
annual run rate. With about 50 million I&O, the market is only valuing
the company at $57.5 million.
Any hint of profitability and this
stock is likely to continue moving up. On the cost side, TTGL generated
$7.5
million in non cash charges in the quarter. Take out the non cash charges,
and voila- you have a profitable company.
Costs are going down elsewhere as
well. For example, TTGL has been quite expansive about the 10% excise
tax they have been paying. The IRS told them they didn't have to, and they
are getting a rebate. Settlements are coming from the IRS and Sprint.
They are in negotiations with AT&T for a rebate. Their costs
are going down by 10% for long distance.
The also refinanced their debt on
January 1 from a debt instrument with complicated equity components to
simple cash debt with a much lower interest rate. Of the $7.5 million in
non-cash expenses, $4 million were related to the debt instruments. Those
are simply gone next quarter, and the charges could come back into the
income statement. They relate to unexcercised options, and the costs go
up as the stock goes up. It's crazy accounting stuff no one can figure
out.
And, here's one more little nugget.
They now own their own switch. They produce their own long distance time
at a greatly reduced cost to them. When you sell 35 million international
phone cards every year, that's big deal.
Want to see a nearly perfect 61.8%
retracement? Check out this chart. It's fairly short term- just this year.
If you measure the move the stock has made from January 1, you will see
the perfect 61.8% retracement is $1.09.
There are a couple of components
which make this chart compelling. First, the stock got down to $1.10,
and bounced. Secondly, it got down to $1.10 on greatly decreased
volume, which suggests it is just sort of drifting down.
Here's the bottom line- if you want
to own these stocks right, you have to own them when they are cheap and
quiet. Then, when I'm reporting a major corporate event, and the stock
is trading up rapidly on ten times normal volume, you can either sit tight
or be a seller.
Wall Street is still the only place
shoppers don't want to buy the same merchandise on sale. If you would
do it at Nordstrom, do it now.
Accumulate immediately up to $1.20.
SSL-
moved up to $1.
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