Investors are Happy with TechPrecision Corp (OTCMKTS:TPCS)’s Results
There are some things not to like about TechPrecision Corp (OTCMKTS:TPCS). The business plan, for example, is pretty conventional – the company manufactures large scale metal components and equipment. Of course, there’s nothing wrong with it, but this is the OTC Markets and usually, the people investing in OTC companies are looking for something exciting and revolutionary. Unfortunately, precision metal components don’t cut the mustard on that front.
In addition to this, TPCS isn’t particularly active when it comes to press releases. In fact, outside the PR’s that come out whenever the company files a financial report, TPCS have had almost nothing to announce over the last few years. This, in turn, means that the few investors who are paying attention tend to lose interest pretty quickly. As a result, the volumes have been dismal. Recently, we even started witnessing zero-volume days which suggests that there are some serious liquidity issues.
Unfortunately, TPCS‘ performance isn’t exactly pretty, either. Less than two years ago, the ticker was hovering well above $1 per share and back then, some people were saying that it’s “poised to triple”. TPCS didn’t triple. It crumbled and it’s now fighting to stay above the $0.20 mark.
It is moving, though, and it’s also experiencing some volumes. First, on Monday, investors pushed the ticker above the $0.10 per share mark, and yesterday, after trading more than 970 thousand shares, they helped it reach $0.19. It’s still too early to say what we’re going to see today, but we’ll probably witness an interesting session. A couple of minutes after the opening bell, TPCS is sitting at $0.21 or about 10% in the green.
The reason for all the excitement is the 10-Q for the second calendar quarter of 2015. It came out about an hour after the end of Friday’s session and it presented us with the following figures:
- cash: $1,464,760
- current assets: $5,515,172
- current liabilities: $7,384,377
- quarterly revenue: $4,374,975
- quarterly net income: $206,351
You might be a bit worried about the 30% year-over-year drop in revenues, but as the company pointed out in a press release from Monday, on a sequential basis, the sales have actually grown by about 12%. Perhaps more importantly, this was the first quarter in a very long while that ended with a positive bottom line.
Of course, the financial statement is not without its faults. The working capital deficit, for example, is quite big, but the company’s debt doesn’t consist of the usual toxic notes that we’re used to seeing from penny stock companies, which, in turn, means that, at least for the time being, dilution is kept in check.
So, the company does have its traits. That doesn’t mean, however, that you should place your Buy order without thinking about the risks carefully. As we have seen over the last few years, the market, and not the 10-Q or your own opinion, is the thing that decides TPCS‘ direction when it comes to stock performance.
