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Teletouch Communications (TLLE) Shows Potential With Another Key Deal

|Includes: T, Teletouch Communications Inc. (TLLE)

Since deciding to focus on its core distribution business earlier this year, Teletouch Communications (TLLE) has announced a flurry of new deals that have potentially positioned the company to realize significant growth over the coming quarters. Just last month alone Teletouch's wholly-owned subsidiary, Progressive Concepts, Inc. dba PCI Wholesale, has landed multiple distribution agreements with key players in the industry, including Wilson Electronics, Parrot, Inc., Aerovoice, Inc., and PureGear, among others.

The trend of landing new contracts continued this week when Teletouch announced a multi-year national supply and distribution agreement with TCT Mobile Multinational, Limited, a subsidiary of the publicly traded consumer electronics manufacturer, TCL Communication. The deal allows Teletouch to sell and distribute TCT's ALCATEL ONE TOUCH branded mobile phones.

According to a Thursday press release, "Teletouch has been named as a distributor in the United States for all Tier-1 wireless carriers' indirect distribution channels, including agents, dealers, independent retailers, MVNEs, resellers, distributors and/or similar wireless businesses (but not including any tier-1 carrier-owned retail outlets or affiliated distributors), and any Tier-2 or Tier-3 wireless carrier or operators (i.e., all other wireless carriers in the United States), as well as for certain exclusive customer accounts, including a number of national retailers."

T. A. "Kip" Hyde, Jr., President and COO of Teletouch, also highlighted in the press release that "The completion of this initial agreement with a leading global cellular handset manufacturer is a key milestone in Teletouch's stated effort to transform our core business from primarily providing AT&T (T)-based cellular billing services on a limited regional basis to becoming a prominent national wholesale wireless equipment distribution company."

Trading volume for TLLE shares have been picking up along with the notable boost in news flow and Thursday's news was accompanied by volume of well more than double the daily norm. Shares also closed at forty nine cents after trading at around forty for most of the week.

As Teletouch continues to expand its core distribution business, it's worth keeping an eye on TLLE as a potential growth play. Although shares were trading significantly higher, in terms of percentages, just a few months ago, enough volume has been flowing in at around the forty cent level to indicate that a foundation may be forming for an eventual move higher.

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