Tel-Instrument Electronics Corp. (TIKK)

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The small cap oracles new pick and why we are so excited about this one.

Tel-Instrument Electronics Corp. (NYSE-MKT: TIK)


TIK is a 68 year old U.S. company about to embark on a multi-year growth story that has been in the works for many years. As you also can see TIK traded in the $6 to $9 range for couple of years recently when there was no growth & no profitability but investors got tired of waiting & the Govt. delays which are finally over leaving a high growth story totally ignored at the moment. It never takes long though for these stories to gain meaningful traction once found.



1. Going from a multi-year money loser to a multi-year growth & highly profitable company is always one of the best catalysts to find especially before everyone else does.

2. Has all three in! vestor catalysts. Growth, Profitability and Great forward guidance & outlook.

3. High Insider ownership with over 1.6 million shares of the 3.22 million out and zero insider sales in years in fact despite their high ownership they have added shares, see form 4 filings.

4. High barrier to entry with virtually zero possibility at this point of any competition. Tel is the ONLY U.S supplier of mode 5 test sets and has a monopoly on the new mandated mode 5 test sets.

5. Mode 4 is being decertified and not only the U.S but ALL 28 NATO countries MUST upgrade to new mode 5 adding incredible forward guidance and growth for the next 5 to 7 YEARS !!!!

6. TIK’s CEO delivering on adding new products as one was released June 1st and more to come this year adding more growth & profitability.

7. Fixed SG&A and R & D costs with no distributors or commission sales people as Tel deals directly with governments so as sales ramp more profits fall to the bott! om line with strong margins currently in low 30% area expected to ramp to historic norms of 40% as higher margin add on orders kick in later this fiscal year.

8. Tel has almost 14 million dollars in Net Operating loss carry forwards offsetting tax expense for approximately five plus years giving investors a very long continued additional profit stream and why Non-Gaap EPS should be so strong for years to come.

9. Tel up against very weak 1st & 2nd quarter comps from last year & should show high revenue growth & go from money losing quarters last year to highly profitable quarters this year.

10. The 4th quarter results on June 24th will be the first full quarter of all 3 large multi-year contracts being in place not only taking Tel from money loser to profitable but going to highly profitable and will have steady repeatable quarter’s throughout the upcoming fiscal year due to these 3 contracts with many new ones expected. With zero new contracts for the entire upcoming fiscal year (Never has happened) Tel has already lock! ed up 50% growth year over year.

11. Current valuation is insanely cheap by any metric used & once found by the masses we cannot imagine TIK trading at 4X's forward EPS especially considering the tiny float & incredibly strong visibility the next few Years into their business.