The last week has been difficult for small stocks as the correction was violent and swift. Now, everyone is panting in the aftermath, wondering if this is indeed a correction in an ongoing bull market- and therefore a buying opportunity- or the beginning of a bear market.
Those who read last weekend’s edition know I am fully in the Bull Camp.
I don’t know why, or if there is any particular reason- but TTGL is enjoying a little stealth rally today.
It’s not so much that the stock is up on reasonably light volume- it’s more about the technical barrier the stock has broken that makes today significant.
Here’s the chart:
I have been writing about the $1.40 ceiling on this stock. It has now butted up against this level three times in 2007, but could never make it above.
Today, the stock has finally pierced the $1.40 line, and is now trading at a new multi year high and a new post OTC Journal coverage all time high.
I would like to see the stock close above the $1.40 mark today to really seal the deal. So- what does this mean to the stock?
It doesn’t mean the stock will never trade below the $1.40 mark again. It simply means the stock should trade through that previous resistance level quite easily next time it surges on volume.
This is a very good sign technically. I am encouraged now that we could see much higher levels once we do get a sustainable rally. This could be a precusor to the stock trading into the $1.80 to $2 range.
Comments and questions are welcome.
low low volume lately… down along w/ the market and low interest level. They finished Q1 already I think in FEB. Should we see any pre-announcement or Q1 earnings in April? no matter what kind of news is released, the stock doesn’t seem to move much. it goes up a few cents and then it comes down few days later. valuation is very appealing but what will it take?
Editor: I believe Q1 numbers will be very important- hopefully the market will have passed through this corrective phase and be healthier when they deliver Q1 numbers- Q2 and Q3 will also show major improvements. Also- they need to collect the promised funds from the excise tax rebate and pay down debt. That would be very important.
wow.. down to 1.14 now.. what happened? after hitting 1.5 just a week ago… not much volume but big % drop…
Editor: It will make up the low volume drop on its next good day. I don’t have much concern about it.
OUCH!! Is there some news out on this stock that isn’t positive? How was the CEO radio deal on the 12th? Any additional thoughts you have to share?
Thanks,
Paul
Editor: I’m sure something is coming. Just stand by. Not much volume- just drifting lower.
First Quarter numbers are in. Obviously the market did not think much of news in either direction. What is your take. Are they delivering on their expectations or not?
Editor: 1st Qtr numbers are not in. The only thing we know is the top line. The most important thing is the bottom line. So far, so good. I believe the Q1 numbers could open some eyes.
your thoughts on latest news – Prism joint venture in China/Asia? This stock has full of news but moves so little (as you say, buyer’s strike). What will it take? needs to show earnings or at least significant debt reductions that lead to imminent earnings (sooner than later)…
Editor: You hit the nail on the head. Earnings and debt reduction. They need to get this tax rebate money into their bank account, and use it to pay down debt. I have a high level of confidence it will all happen over time. The Prism deal is all about reducing cost, which increases margins and profits.
I wanted to follow up on the last comment by Tae. I don’t know alot about the telecommunications business myself, so I’m wondering how to interpret the following from the Titan press release regarding Prism: Under the definitive letter of intent, Titan was granted an exclusive option for a period of 60 days to enter into an agreement pursuant to which Titan will manage Prism’s telecom facility and pay Prism $.001US for each minute of traffic successfully terminated to intended destinations routed through Prism’s Hong Kong POP site. The term of the eventual agreement would be for one year with Titan’s option to renew the term for three additional terms of three years each on the identical terms. ”
What exactly does this mean? How does Titan gain profit by managing the Prism facility? What are they managing, and what would their costs be in this? Assuming, of course, they exercise their option. Is this a deal that would be accretive to the company in terms of revenues? Do we know how much? Thanks!
Editor: I can explain it as I understand it. One of the keys to profitability for TTGL is to reduce costs, and therefore increase margins. Apparently, in the telecom space, there are fees associated with switching, routing over networks, and terminating calls. Until the last six months or so, TTGL was just a marketing company, dependent on the fees they were charged by Sprint and AT&T for routing the calls from their prepaid cards. They now own their own switches and route and terminate their own calls. Not for all their traffic yet. This is reducing their costs. Apparently, there is a lot of cheap, unused capacity in Asia. This deal is about saving costs for TTGL. More information on this arrangement in the future.
Do we have an earnings release date?
Editor: It has to be by April 15th, but not yet to my knowledge.
I read the press release about the company going to arbitration in June 2007 over aprox. $60 million. Did the company (Titan) pay this much in fees that it would be entitled to recover? If Titan and their predecessors recovered the full $60 million, would Titan receive all the monies, or would some of the monies go to predecessor companies, i.e. not Titan shareholders? If they were to receive $60 million, isn’t that about the same valuation the company is trading for now? ($1.20 * 48 million shares I & O = $57.6 million) What am I missing or not understanding about this? Help me out in figuring this out.
Editor: I’m not sure the company believes it can recover monies to those levels. I believe in a best case scenario they hope to recover somewhere in the $20 million range. If they are successful, they will use the money to make the company debt free, at which point you would have one hell of a strong company financially. Worth at least $4 to $5 per share.
what happens if earnings do not come out by this Friday? with just one day to go – it seems likely to come out after market closes on Friday… your thoughts?
Editor: They have to come out in the next day or two to remain in regulatory compliance. Their quarter ended at the end of February.
I was wondering when the company intends to spin off the Titan East & West PCB to their shareholders.Is there a timeline for this?
Editor: I am actually speaking with the CFO today and will ask him. I believe they are working on the SEC filing right now- a document called a Form 10 which will allow them to do it.
Looking for your technical evaluation of the stock – seems like it is still resisting the $1.40 level even after the latest earnings report. Do you expect any further upside, and if so, what do think is the next level for the stock?
Editor: As you point out, the stock seems to butt up against that $1.40 number and can’t break through. My guess it it pulls back to about $1.20 again. One of these days it will break out as long as the company continues improving. Will do some work on where it could go in the future.
The results are quite frankly astonishing. I just wonder how much of the EBITDA is due to one-time gains. There is a hint with regard to the homeland division but I wonder if there are any one-time gains in the communications division as they reported an EBITDA margin of 21%. If not I think we would have rethink the EBITDA target for Fiscal 2007 as it looks way too conservative. Do you have any knowledge about the one-time impacts? Fortunately I reacted to your comments last week and bought some more shares before the announcement…
editor: The communications division, which is going to be spun out, had a lousy quarter and is actually hurting the results. I am still analyzing the numbers- the key to this one is debt reduction, and I believe they have reduced their debt by $9 million over the quarter if I am interpreting the numbers correctly. I expect the company will continue to improve on an ongoing basis from here.
Titan has a conference call scheduled for tomorrow regarding its latest quarterly earnings report. Is there anything that we, as investors, should be listening for specifically on the call?
Editor: How they plan to reduce their debt. I will listen to the replay at some point.
I think there is a mistake in your answer to my question as it is – hopefully – not the communications division which is going to be spun out but rather the Titan East & West PCB. The communications division had a great quarter and reported an EBITDA of 6.6 MUSD. If this margin is sustainable their forecast for Fiscal 07 is extremely conservative.
Editor: Public companies serve their image well by underpromising and overperforming.
What balance sheet improvements does Titan have yet to make? Do you expect a profit from the company next quarter? If so, what do you think we can expect in terms of earnings? What about for the full year?
Editor: The company has $22 million in debt, and paid $1.5 million in interest last quarter. It has negative shareholders equity. It has some derivates (warrants) that hurt the financial performance that are non-cash. Basically, all the crap needs to be gone, and this stock will be worth $4 to $6- As they receive rebates on the excise tax, they will pay down the debt and the company will be much healthier.
I always check the prepaid phone card machines at airports and I don’t believe they are owned by Titan (Oblio). Where do they sell these? Also, in the latest news release they still mention their electronics contract manuf. business. Are they still in line to sell it off?
Editor: Let me correct a couple of you misconceptions- their phone cards are only targeted towards the huge immigrant population all over the southern US- they are all international, and done in Spanish and Asian languages. They are sold through a network of small retail stores where the populations are heavily ethnic- there are thousands of these stores. In addition- they are not selling the electronics division- they are spinning it out into a separate public company, and dividending the shares out to shareholders.
pretty frustrating move lately… even after earnings. where do you see this going? it’s hard to imagine we are trading lower now than before the earnings came out.
Editor: It seems to have support at this level. However, the stock’s performance is definitely disappointing. It just can’t get through that $1.40 level. If the company keeps delivering results, it will break through some day. However, investors are definitely getting impatient.
I noticed on the sec.gov website that the company filed an SB-2 on March 8th relating to a sale of 8,140,000 shares of common stock. Won’t this offering, once finalized, depress the stock, or is this actually good news? Perhaps you can explain who the selling stockholders are? I also didn’t see any press releases explaining this offering, did I miss it? Perhaps you could also comment on the technical chart of TTGL again.
Editor: The selling shareholder is primarily one fund who holds convertible debt. The number of shares they are entitled to is actually considerably less than the number being registered- most of the shares being registered are not even issued at this time. The convertible debt is probably keeping some big players out of the market for this stock, but it will get cleaned up eventually.
looks like we are just breaking out but to the downside in spite of the good numbers. can you comment on the technical situation? Where are we heading to and what about retracement levels?
Editor: Please see yesterday’s posting after your question.
wow. big slide in 2 days.. today’s drop on a good volume. what do you make of it? no news.. just panic selling or selling on frustration… can’t believe this is $1 now after stellar earnings… i just don’t get it.
still holding all but numb from this..
perhaps you can help to provide some insights
Editor: Please see yesterday’s BLOG posting after your question.
Titan had been holding with low volume. It had seemed all the sellers were out. All of a sudden with no news there is a sell off. Hard to understand after the company finally shows a profit. Since it rolled thru your SSL of $1.04 – does the chart say we should hold in for now and see if there is support or is it now in a down trend?
Editor: Please see my BLOG posting after your question.
So what is with this stock trading at $1.05 and even less per share. Is there something going on that we do not know?
Editor: Please see my BLOG posting after your question was posed yesterday.