Treecon Resources (TCOR) closed today with a stock price of $0.35 giving a market cap of $7.9M. This for a company with TTM revenue of $80M and $0.181 EPS. I like buying stocks at 2x earnings, how about you?
Before you get too excited there are some drawbacks. I don't know how much of the most recent quarter's $0.08 EPS is due to one-off items because the company doesn't talk much. They provide limited quarterly financials on their website here with a press release here, but they do not file officially with the SEC or OTCmarkets so they have the dreaded Stop Sign of Darkness:
"TreeCon Resources, Inc., is a holding company that, through its subsidiaries, operates a portfolio of businesses based primarily in the east Texas forest region.I say supposedly because the company won't communicate any more than what you see on the website. All I have is that plus anecdotes from other shareholders. I got a hold of the CFO at the end of last year by guessing her email enough times that one of them finally went through. I sent my list of questions but didn't get the response I was looking for:
Logging and heavy equipment dealership operations are conducted through the Company's wholly owned subsidiary Texas Timberjack, with sales, leasing, financing and service locations in Lufkin, Jasper and Cleveland, Texas.
Lumber and treating operations are conducted through it's wholly owned subsidiaries, Southern Forest Products in Newton County, Texas and International Forest Products in Houston, Texas.
Texas Frac Fluids operates an oilfield services facility in northeast Texas producing water-based fluids for the oil and gas industry.
The Company also owns and manages a real estate portfolio consisting primarily of timberlands in Texas and Louisiana."
Thank you for your inquiry. Please see our website for published information. http://treeconresources.com, Have a safe and merry Christmas."
I think the stock is down so hard recently because of the stupid new SEC rule. TCOR has the stop sign and has shown no desire to change that. Schwab will no longer let me buy the stock and in another month I'm not sure what brokerages will. The congregation is rushing the exit before they get locked inside.
Given enough time, effort, and money there will be ways to buy. I just don't know what those ways are or how it'll change in the next few months. So far I've heard Robotti is a possibility.
Still the stock is Cheap with a capital C. Check these numbers from the most recent annual:
- 22.62M shares out
- $35.7M book value
- $76.7M revenue
- $2.1M net income
- had $1.25M "other income" from PPP
At a stock price os $0.35 the stock trades at 2x earnings, 1/10 of TTM sales, 1/5 of the most recently reported book value. The risk is you don't really know everything behind the curtain but that's also the allure. What happens when that timber land is ready for harvest?
One interesting thing is the company has posted 3 full annual reports to their site. They're not referenced anywhere and I only found by googling. Unfortunately it doesn't appear to be something they keep up.
I've made a spread sheet of all their reported numbers. Here are quarterly EPS and revenue:
disclosure: long TCOR