December 15, 2024
Total Telcom (TTZ.V / TTLTF) is a profitable Canadian microcap company, with recurring revenues, no debt, and half of its market cap in cash. Total Telcom offers remote asset management solutions. They specialize in innovative wireless technologies, making it affordable and user-friendly for businesses and consumers to monitor and control their assets remotely.
Their offerings include advanced wireless modems that utilize microcomputers integrated with sensors, GPS engines, WiFi, RFID, and a variety of inputs and outputs. One of their strengths is the user-friendly interface, which requires no special applications or equipment for configuration. Users can easily set up and control these systems through a wireless WiFi connection using any smartphone, tablet, or laptop.
In addition, Total Telcom’s subsidiary, ROM, plays a crucial role as an authorized airtime reseller and hardware developer for satellite, cellular, and wireless IP networks. This integration of technology across various platforms highlights Total Telcom’s position as a key player in the communications industry, keeping the world connected through smarter, more efficient methods.
(h/t Rodrigo Lezama, MicroCapClub.com)
Estimated figures for 2026 in Canadian dollars: Revenue $3.4 million CAD. Net income of $670,000 CAD. EBITDA $804,000 CAD. Cash flow $837,000 CAD. Market cap = $5.81 million CAD. Enterprise value (EV) = $3.39 million CAD.
Metrics of cheapness based on 2026 estimatesa:
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- EV/EBITDA = 4.22
- P/E = 8.67
- P/B = 1.17
- P/CF = 6.94
- P/S = 1.71
ROE = 14.3%, which is OK. The Piotroski F_Score is 7, which is good.
Insider ownership is 30%+, which is excellent. Cash is $2.79 million CAD. Debt = 0. TL/TA (total liabilities to total assets) is 11.5%, which is outstanding.
Intrinsic value scenarios:
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- Low case: Net income could drop and so could the stock. But book value per share is $0.19 CAD whereas the current stock price is $0.22 CAD. So there is some downside protection from book value.
- Mid case: EPS in 2026 should be $0.024 CAD. With a P/E of 16, the stock is worth $0.384 CAD. That is 75% higher than today’s stock price of $0.22 CAD.
- High case: EPS in 2026 could reach $0.03 CAD. With a P/E of 20, the stock is worth $0.60 CAD. That is over 170% higher than today’s stock price of $0.22 CAD.
- Very high case: The company could grow significantly and the stock could return multiples of the current price.
RISKS
Net income could decline and so could the stock. Or there could be a bear market or recession. In any case, there is some downside protection from book value.
BOOLE MICROCAP FUND
An equal weighted group of micro caps generally far outperforms an equal weighted (or cap-weighted) group of larger stocks over time. See the historical chart here: https://boolefund.com/best-performers-microcap-stocks/
This outperformance increases significantly by focusing on cheap micro caps. Performance can be further boosted by isolating cheap microcap companies that show improving fundamentals. We rank microcap stocks based on these and similar criteria.
There are roughly 10-20 positions in the portfolio. The size of each position is determined by its rank. Typically the largest position is 15-20% (at cost), while the average position is 8-10% (at cost). Positions are held for 3 to 5 years unless a stock approaches intrinsic value sooner or an error has been discovered.
The mission of the Boole Fund is to outperform the S&P 500 Index by at least 5% per year (net of fees) over 5-year periods. We also aim to outpace the Russell Microcap Index by at least 2% per year (net). The Boole Fund has low fees.
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Disclosures: Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Boole Capital, LLC.