We have added Total Telcom (TSX.V: TTZ) to the Smallcap Discoveries Select Portfolio.
We will follow up with more details including an overview of the business at a future date.
A few brief highlights on the Company, and why it fits our criteria.
About: The Company, through its wholly owned subsidiary ROM Communications Inc. (ROM) is a leading developer and provider of remote asset monitoring and tracking products and services throughout North America. ROM specializes in the development of innovative wireless communications that provide low cost, high tech monitoring, tracking and remote control solutions for commercial, industrial and consumer applications. ROM is uniquely positioned and qualified to deliver complete web to wireless solutions that enable companies and organizations to remotely monitor, track and control their fixed and mobile assets with a web browser from any Internet enabled PC. Products and services are based on ROM’s web to wireless technology and proprietary 2nd generation hardware & software marketed
as TextAnywhere, ROM Controllers, ROMTraX, MotoTraX, TraX, DataTraX, WaterTraX, SiteTraX, CamTraX and AlarmTraX. These modules are wireless modems that utilize microcomputers integrated with sensors, GPS engines
and various inputs and outputs and interfaced by the user through the Internet. ROM is an authorized airtime reseller and hardware developer for satellite, cellular and wireless IP Networks.
Highlights: - Profitability: Have been profitable ever year since 2017.
- TTM Net income: $465K
- TTM Revenue: $2.08M - Up 30% Y/Y/
- Last Q Revenue: $678K - up 97% Y/Y - Record quarter.
- Margin of Safety: $1.94M in cash and equivalents. $40K debt. Enterprise Value of $3.5M. We know there are other buyers of the business outright at these prices.
- Valuation: TTM EV/E - 7.6x / TTM P/E - 11.7x.
- Launched New Products / New Markets: Anticipated $1M increase in revenue annually.
- Limited Dilution Risk: Company has essentially reached the break-even point from its recurring business
- Platform for Growth: Total Telcom is a great platform piece for future growth. If possible, M&A could change the growth profile of the business. Would create a re-rating as optics change around the business valuation given any potential M&A strategy.
- Strong Insider Ownership & Salary: 7.97M shares owned by CEO and Directors. CEO compensation $130K and CFO compensation $40K. 1.1M stock options oustanding.
- Illiquid and Undiscovered: Look at their website, there's no investors paying attention to this company. It trades about $6K worth of shares a day. Perfect type of stock for a small retail investor.
** Paul and Trevor are shareholders of TTZ. Given the illiquid nature of how the stock trades, we are going to be slow, and steady buyers up to $0.22 for now.
Price - $0.20 Issued and Outstanding - 26M Market Cap - $5.4M |
