Joshua Heller's  Instablog

Joshua Heller
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Stock investors are always asking what is the catalyst for value to be realized? I originally thought like this which lead me to take too much risk. I now focus on being patient, controlling risk, and minimizing permanent capital losses. These steps have lead to significantly better returns.... More
  • (TSCM) trading for (almost) cash on the balance sheet 0 comments
    Oct 9, 2010 2:33 PM | about stocks: TST (TSCM) closed at $2.85 on October 8th, 2010.

    Highlights from the 2nd quarter include:

    • Advertising revenues were up 6% year over year
    • Subscription revenues were up 9% year over year
    • Jim Cramer accounted for less than 1% of our site traffic, ranking 24th among our contributors and authors
    • Generating positive FCF, cash on balance sheet increased by 1MM from the previous quarter (in part due to sale of non-core asset)

    TSCM ended the quarter with $82.6MM in cash equivalents, higher by 1MM which includes a dividend payment of $900,000 and sale of non-core assets.  TSCM does not have any debt.  With a current market cap of $88.7MM, the market is only valuing the business for 6.1MM.

    For those worried that Jim Cramer might leave the company, Jim Cramer accounts for less than 1% of the site traffic.

    Another reason why I like buying TSCM here is that the stock is not pricing in any catalysts.  There are two catalysts on the horizon, a stronger economy (higher advertising revenue) and a stronger stock market (more advertising revenue and higher subscription revenues).  If neither of these occur, the stock is protected by the cash on the balance sheet.

    While there is nothing written in stone that says a company must trade higher than their net cash balance, I believe that the price today is an attractive entry point.  

    TSCM pays a quarterly dividend of $0.025 per share, an approximate yield of 3.5% at today's closing price.

    Disclosure: Long TSCM
    Stocks: TST
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