Shares of Tucows Inc. (AMEX: TCX) penny stock tested their 52 week high on Friday which begs the question: Can TCX hit $2? TCX stock closed up .20, 14.29%, at $1.60 on its highest volume year to date, just over 2 million, in the last trading session. TCX continued to gain in after hours trading closing at $1.67, up another 0.07 (4.37%) and reaching a new 52 week high. The PPS on the penny stock has more than doubled now since mid-February from 0.81 to $1.67 for the worldwide internet service provider. So, what makes the milk from Tucows so good?
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TCX Stock Chart
Market Cap: 73.98M
Trailing P/E: 12.31
(fye Dec 31, 2013): 14.55
Price/Sales (ttm): 0.63
Price/Book (mrq): 2.45
(May 25, 2012): 1.67
(Aug 18, 2011): 0.71
50-Day Moving Avg: 1.36
200-Day Moving Avg: 0.98
Avg Vol (3 month): 383,812
Avg Vol (10 day): 570,011
Shares Outstanding: 46.24M
% Held by Insiders: 11.36%
% Held by Institutions: 21.90%
Tucows Inc Q1 Financial Highlights:
Looking at Tucows Inc.’s Q1 earnings for the three months ended March 31, 2012, its hard to be skeptical of their 22.09% revenue growth compared to the same period the year before. The Company reported revenue of $27,537,306, more than 10% of which came from new customers. That alone speaks highly of future earnings estimates. Gross profit for Q1 was $6,829,963, an increase of 27.87% compared to $5,341,268 for the same period the year before. The increase in both revenues and gross profit, coupled with expenses with remained virtually unchanged, led to a $.04 Basic EPS, $0.03 Diluted EPS for Q1 compared to $0.01 and $0.01 respectively for the same period the year before.
Yet in an even better assessment of their ability to not only generate, but to collect revenue, no customer accounted for 10% of accounts receivable as of March 31, 2012 compared to the same period last year when one customer accounted for 12% of accounts receivable.
TCX Stock Tips:
The penny stock is in an extremely bullish trend as can be seen on the stock chart above. RSI has surely surpassed 67.31 with the after hours trading on Friday and the MACD crossover is strengthening. All indicators are expressing BUY TCX stock.
TCX has two resistance pints to break next now that it has set a new 52 week high, $1.69 being the first and $1.79 being the second. TCX stock has never been in this range before so everything from here on out is all new territory if the penny stock can continue its bullish pattern. With the Company’s share repurchase plan, $2 is not out-of-sight for TCX.
On January 23, 2012, Tucows announced that it successfully concluded a modified “Dutch auction tender offer” and repurchased an aggregate of 7,570,236 shares of its common stock at a purchase price of $0.77 per share. All shares purchased in the tender offer received the same price and all shares repurchased were immediately cancelled. As a result of the completion of the tender offer, the Company had 46,047,053 shares issued and outstanding.
On March 16, 2012, Tucows announced that it was reinstating its previously announced stock buyback program, which initially commenced on November 15, 2011 and which was temporarily suspended when the Company undertook its Dutch auction tender offer. Under this buyback program, Tucows may repurchase up to 3,840,000 shares of their common stock over the 12-month period that commenced on November 15, 2011. Tucows did not repurchase any shares under this program during Q1.
About TCX Stock:
Tucows Inc., together with their consolidated subsidiaries, is a distributor of Internet services, including domain name registration, security and identity products, email, and mobile telephony services both through its global Internet-based wholesale distribution network of Internet Service Providers, web hosting companies and other providers of Internet services to end-users and through retail websites directly to end-users. The Company’s principal executive office is located in Toronto, Ontario and they have other offices in the Netherlands, Germany, and the U.S.
Tucows subsidiaries to date are:
• OpenSRS manages over 11 million domain names and millions of email boxes through a reseller network of over 12,000 web hosts and ISPs
• Hover is the easiest way for individuals and small businesses to manage their domain names and email addresses
• Ting is a mobile phone service provider dedicated to bringing clarity and control to U.S. mobile phone users
• YummyNames owns premium domain names that generate revenue through advertising or resale
Bottom Line: The penny stockof Tucows Inc., TCX, must be on the list of penny stocks to watch when the market opens on Tuesday. Note that the Company reported revenue fye December 31, 2011 of $102.05M, $1.98 per share. With the voluntary repurchase program and adequate capital available, investors should clearly be in line for a benefit both short and long term.
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