Logical Thought's  Instablog

I recently accumulated a decent-sized position (at a basis of CAD 0.76/share for my fund and CAD 0.81/share for my PA) in a small Canadian technology company called Titan Logix. Titan Logix makes radar-based fluid level measurement devices (replacing old-fashioned mechanical systems) for tanker trucks, primarily in the energy and aircraft industry but soon to expand into other fluids, including edibles. The company has approximately $4 million in annualized run-rate EBITDA (net of capex) and around .12/share in annualized run-rate earnings with around $7 million of net cash. Thus with around 26 million fully diluted shares outstanding, at tonight's close of CAD 0.88/share it's selling for around $16 million net of the cash which is only around 4x EBITDA, 5x earnings and 1x revenue for a fast-growing company (albeit, one with some short-term oil & gas cyclicality) with gross margins in the range of 50%. A modest 12x multiple on those earnings plus the cash would make this a $1.70 stock while a "growth multiple" would put it well over $2.

Disclosure: I am long TPCFF.PK.

Additional disclosure: The Canadian ticker for Titan Logix is TLA and I'm long both the Canadian and the U.S. listings

Please read this:

tinyurl.com/b8pkshm

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Over the past few months, I've continued to accumulate a very substantial BWEN position, now at a blended split-adjusted basis of $2.20/share. The Production Tax Credit (PTC) has made it into the "cliff compromise bill" and to qualify for this new extension the project only has to BEGIN construction in 2013, as opposed to the expired 2012 credit which required calendar-year completion. This will have a VERY meaningful impact on the 2013 wind industry and on BWEN in particular. Based on the numbers in my earlier Instablog post I think that by year-end 2013 this stock will see a $6-handle on it.

The next step for the PTC will be a multi-year extension with a gradual phase-out; this will provide enough certainty to project $12-$14 million in 2014 EBITDA less capex for BWEN. A 7x multiple on that plus $20 million in cash value for the NOL carryforwards would equal mid-$7s to mid-$8s in the stock price 18 months from now vs. yesterday's close of just $2.16.

Disclosure: I am long BWEN.