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Titan Logix (Ticker TLA In Canada, TPCFF In The U.S.)

|Includes:Titan Logix Corp. (TPCFF)

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 OTC:TPCFF.

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

Stocks: TPCFF