TELT reported Q1 earnings of $0.031/share for Q1 late on Friday yet they last traded at $0.07/share! They are in the process of a turn around. They have drastically cut expenses and are expanding. Q1 revenue was up 15.9% YOY and 14% sequentially. The balance sheet is a weakness but I think the risk/reward here is quite good. They are trading at an annualised PE of only 0.6 so I think they could be a multi-bagger! Here is some more DD:
- Teltronics, Inc. engages in design, installation, development, manufacture, and marketing of electronic hardware and application software products primarily in the telecommunication industry.
- Q4 backlog increase from $12,374,000 at December 31, 2007 to $17,181,000 at December 31, 2008.
- From the 10-Q: "Additionally, management has lead an effort to increase sales worldwide, but more specifically in the promotion of its higher gross profit margin products. That effort has lead to an increase in orders of 20-20 switching system installations with some of the Company’s largest customers. Through mid-April 2009 the Company has orders or has completed installations including several which had been originally budgeted for 2008. Management anticipates an increase in 20-20 switching system installations in 2009 over those installed in 2008 based on the installations which have occurred and the orders they have received."
- Here are some notes on cost cutting from the 10-K: " Further cuts were made in December reducing payroll and related benefits saving an additional $1,800. The Company also made a decision to cut the Company’s payroll across the board by 10%, suspending its 401(k) match and freezing future pay increases until further notice. This will save an additional $1,500 in 2009."
- TELT is a low float stock. They have only 8,647,539 shares of common stock outstanding and 36% or 3,110,167 are held by insiders. |
