Savvy Trades and Investments

[gilead23]

TMG.V/TMGEF picked up some of this

It's so thinly traded that it's really hard to own much and I don't intend to, but I think the setup here looks really good to possibly double.

The company sells industrial energy efficiency and emission reduction equipment primarily in the US, Canada, and Europe. Their European business is doing quite well right now as you might imagine. The company backlog has gone through the roof from 7 million a year ago to 17 million at the end of last quarter to 19.5 million today.

Historically going back through the data from 2011 to 2019 they have typically cycled through backlog at least once every 6 months. Doing the math if that holds true here that would mean they will roughly double their current revenues over the next 2 quarters. Gross margins have been historically stable so I'm guessing that would result in earnings of about a million dollars a quarter all else equal meaning no significant margin erosion or excessive SG&A. Market cap is 20 million.

So as far as a setup this is a company whose entire business is to reduce energy use and GHG emissions selling into Europe and North America with a huge revenue ramp and a possible forward projected PE of 5. The stock has a history of making money in good quarters so it isn't a perpetual loser, and the share price was actually higher a year ago with a much weaker outlook.

Like I said you can't own much of this given the liquidity, but I like it as a terrific risk/reward with further upside if the pace of orders continues. I think energy efficiency for industry should be an easy sell in Europe given their energy issues.