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Real Value in the Tech Sector, Potential large catalyst and Potential Triple Digit Gains Near-Term
Good morning everyone,
Today we are initiating coverage on TSR, Inc. (NASDAQ: TSRI). This company has the attributes we like, tiny float (Approx. 1M shares), profitable, no debt and growing revenues. When you review the metrics below we think you may agree, this stock is not only a value play but a potential big near term catalyst looms.
Following a rejected offer from a major shareholder to buy all the outstanding shares of TSR the company announced their intent to pursue one or more strategic acquisitions.
December 7th, 2018 - TSR, Inc. Board Decides to Pursue One or More Strategic Acquisitions
“Board has decided that it is in the best interests of the Company and its stockholders to pursue one or more strategic acquisitions. Since its previously announced formation on July 9, 2018, the Special Committee has been considering and evaluating strategic alternatives to maximize stockholder value.”
Full PR- https://finance.yahoo.com/news/tsr-inc-board-decides-pursue-220000723.html
It has been nearly two months since this announcement. We are eager to see potential candidates and corporate updates. As this could be a very big near term catalyst.
Current price $4.76/share
52-week range $3.80 to $8.41
Market cap $9.26 million
Revenues (TTM) $64.42 million
Revenue growth 2013 to 2017 40% (increase YOY 5 years running)
Debt Zero
Outstanding shares 1.96M
Float (est.) 847K
Insider ownership 54%
Cash on hand (MRQ) $5.08 million
In business for 40 years
Profitable
TSR, Inc. provides contract computer programming staffing services in the New York metropolitan area, New England, and the Mid-Atlantic region.
The company has around 400 tech staff deployed at its customers.
It’s one thing to get on a Fortune 1000 firm’s Approved Vendor List. It’s quite another to stay on it for 10, 15 or 20 years.
TSRI Staffing Solutions:
Top Application Designers & Developers
Object-Oriented Designers, Developers & Architects
Programmers
Business Analysts
Senior Project Managers
Application & System Architects
Database Administrators
Business Subject Matter Experts
IT Infrastructure Experts
The company operates 3 subsidiaries:
TSR Consulting Services, Inc. New York
Logixtech Solutions, LLC Delaware
Eurologix S.a.r.l. Luxembourg
Conclusion:
TSRI is a 40-year old company that is growing in step with the tech sector.
The TSRI business model has produced consistent financial metrics for at least the past 3 years.
We have seen at least one DCF model yielding a share price of $7.75.
TSRI has a Price to Sales ratio of .14 based on revenue of $62M and a market cap of 9M. The market standard P/S ratio is 1X to 2X, representing a share price of $31.00 to $62.00
And remember, there are only 847,000 (est) shares in the float.
We believe the numbers are there for TSRI shares to see a potentially significant bounce in the near term.
As the chart below indicates, showing a double bottom. TSRI shares slid below their 50 DMA as well as their 200 DMA. The current RSI (14) is only 46.72. Oversold.
We will have updated coverage of TSRI out soon.
Your profit partner,
The Team
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