I don’t know if you’ve been watching Titan Global (OTCBB: TTGL) over the last couple of weeks or not, but I really hope the market’s big tumble and possible rebound haven’t been too distracting. Why? The stock has broken past a ceiling, and I have to wonder if this isn’t the beginning of brighter days.
The catalyst was the Appco acquisition – a major coup for the company in that it not only put them into the energy business, but Appco is doing about four times the sales volume Titan did last year ($400 million versus about $100 million). Shares closed up by 12% the day after the news came out, and have kept right on trucking. They reached a high of $1.38 on Thursday and Friday.
The ensuing technicals just look good to me. That resistance line was broken, and we got some key crossovers in the moving averages (though they’re not shown here). Volume’s been good too.
I have to say I’m now really pleased with TTGL overall. A little over two weeks ago this chart just looked dead in the water. But, as I’ve said just too may times now, the time to own ‘em is when nobody else is thinking about ‘em. Titan’s taking care of business at the corporate level, and the stock has finally started to reflect that.
What I’m really licking my chops over, though, is the size of the move the last time TTGL got rolling in May of last year – it was ultimately a quadrupler.
I think the line in the sand is $1.40, where we peaked three times over the span of four months earlier in the year. We actually got as high as $1.49 in March, but I don’t believe that barrier is quite as meaningful. If resistance at $1.40 is passed, I believe this one could sprout wings.
how do you think the decision to issue 10,000,000 warrents to crivello will impact the company and/or the shares outstanding.
Thanks
Editor: 10 million warrants at $1.30 is pretty hefty, and will represent dilution. However, when exercised they will also give the company an additional $13 million in cash if exercised on a cash basis. If not, it will be less dilutive. The answer to your question is that it is a minor negative.
The news coming from these guys is suddenly fast and furious and on many different fronts. Branding – Purchase of USA Det – Communicaton support fully integrated – Energy Expansion. It all sounds great, but is it possible that they are expanding too fast in too many directions. Are they big enough and large enough to properly supervise all this growth at once.
Editor: What they seem to have in place in the funding to execute on these leverage buy outs. Since neither of them has actually closed, it’s a little too early to call. However, with they acquired the telecom company, they proved they could take a troubled business and turn it into a cash flow machine. The market likes, and therefore so do I for now. However, your concerns are legitimate. We’ll see what’s going to happen from here forward. Nice to see the stock trying to make a new high.
Do you see any risk for the appco acquisition reg financing due to the current “liquidity crisis”? What do you think about the risk of TTGL being seen as opaque due to the recent acquisitions (Appco & USAD)?
Thanks
Editor: Very good question. However, the liquidity crises seems to be limited to the housing market. As far as I know, their financier doesn’t loan in the housing market. Not sure what you mean by opaque? If it means we won’t know the corporate performance for some time, you are right- we won’t know for some time how this all pencils out. In addition, for at least six months to one year there will be a bunch of one time expenses associated with the acquisitions. For the time being I am very happy seeing the stock trade up and try to make new highs. As far as I am concerned, it can keep going.
I am a little short on cash, but am very intrigued by Titan right now. I’m have been sitting on NIHK at .10 for a couple months. I am tempted to get out of NIHK and put the money into TTGL. Do you think this is advisable, considering I am short on cash? Or should I hold on to NIHK and put the little cash I do have into TTGL? TTGL seems like a better company, but I don’t want to miss a spike in NIHK either. What would you do if you were in my position?
Editor: I have no idea which one will trade up first. I believe TTGL is the less risky of the two, but they both have upside, so it’s an impossible question to answer. When I dust off my crystal ball, I’ll let you know.