( TLFX ) New Acquisition Means New Price Target

With the announcement of an LOI to buy another company yesterday, we are raising our target on the low-float stock that has already jumped 50% since our initiation last week

icon Download Report in PDF


TELEFIX COMMUNICATIONS HOLDINGS, INC.
New Acquisition Means Price Target

 

Rob Goldman                                                                                                                       May 24, 2012

rob@goldmanresearch.com

 

TELEFIX COMMUNICATIONS HOLDINGS, INC. (OTC:PK – TLFX - $0.50)

Revised Price Target: $1.75

Rating: Speculative Buy

 

COMPANY SNAPSHOT

INVESTMENT HIGHLIGHTS

 

 

TeleFix Communications, Inc. is a minority and woman-owned telecommunications services company. TeleFix serves the wireless infrastructure development, upgrade, and repair market with a focus on RF design and testing for converged networks and broadband access.  As a Tier Contractor, turnkey supplier, and qualified vendor on behalf of some of the largest technology companies in the U.S., the Company generates revenue through services provided directly to carriers or through these TURF and General Contractors.

The Bottom Line: Just last week, we initiated coverage of TLFX at a price of $0.33 with a price target of $1.10. Although the stock is up by more than 50%, TLFX’s M&A news yesterday prompts us to reiterate our Speculative Buy recommendation and raise our price target to $1.75.

The News: The Company announced that is has signed a letter of intent to acquire VOM Solutions, LLC, a firm with top tier expertise in key disciplines of telecom services ranging from outside plant, wireless, 4G RAN Roll-outs, and DAS Networks.

What this means: VOM’s principals have 60 years of telecom services experience with a specialization in mobile broadband design engineering and implementation, which reflect TeleFix’s sweet spots. VOM brings TLFX serious manpower to enable it to complete multiple large-scale projects at the same time.

Our Take: We believe that this move is both a precursor and great step prior to the Company winning meaningful contracts in the near-term.  In our view, it seals the Company’s positioning and ability to perform and implement multiple projects, including those in other previously non-core areas.

Raising Price Target: In response to this greater positioning, we are reiterating our Speculative Buy recommendation and substantially raising our target to $1.75 per share. Once the deal closes, the Company will be able to win and implement more projects than previously ascertained. We are leaving our forecasts unchanged, pending further visibility.

Bonus: Investors should be aware that due to the Company’s capital structure as a woman-owned entity, there are only a few hundred thousand shares in the public float.  This bonus makes TLFX a great stock to own.

To access the original report, visit www.goldmanresearch.com.

 

KEY STATISTICS

Price as of 5/23/12

$0.50

 

52 Wk High – Low

$0.52 – 0.002

 

Est. Shares Outstanding

96.8M

 

Free Trading Shares

28.0M

 

Restricted Shares

68.8M

 

Market Capitalization

$48.4M

 

 

COMPANY INFORMATION

TeleFix Communications Holdings, Inc.
8205 Olympia Drive
McKinney TX 75070
www.TeleFixcommunications.com
info@TeleFixcommunications.com

 

Analyst: Robert Goldman
Rob Goldman has over 20 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.

Analyst Certification
I, Robert Goldman, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report.

Disclaimer
This Opportunity Research report was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research and Goldman Opportunity Research. The Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports. It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. While stocks in the Opportunity format may have a higher risk profile, they typically offer greater upside as well. Goldman Small Cap Research has been compensated by a third party in the amount of $8, 000 for a research subscription service. The Firm does not accept any equity compensation. All information contained in this report was provided by the Company. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report or note is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This report does not take into account the investment objectives, financial situation, or particular needs of any particular person. This report does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA, the U.S. Securities and Exchange Commission or with any state securities regulatory authority.

ALL INFORMATION IN THIS REPORT IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com