Georgi Kamburov

TechPrecision Corp (OTCMKTS:TPCS) Soars On Fiscal 2016 Results

by Georgi Kamburov June 30, 2016

The average number of traded shares for the past thirty days for TechPrecision Corp (OTCMKTS:TPCS, TPCS message board) is 17,600 shares. Yesterday, in the span of a single session, investors shifted nearly a million of the company's shares. The intense buying was so strong that it pushed the stock over 44% up the chart to a close at $0.324. What could be the reason that caused investors to suddenly rush towards TPCS?

Well, the same reason that was behind the impressive surge up the chart posted by the company back in August 2015 - the announcement of solid financial results. After the end of Tuesday's session TPCS filed their annual report for the fiscal year ended March 31 and published a PR discussing their results. The company continued to show impressive progress posting its fourth profitable quarter in a row and the first full year since 2011 of net profit. As of March 31, 2016, TPCS had:

• $1.33 million cash
• $6.4 million total current assets
• $5.9 million total current liabilities
• $16.85 million net sales
• $1.36 million net income

All you need is a quick glance at the balance sheet to realize that the company is far from the typical pennystock. Not only did TPCS have a respectable cash position of over $1.3 million at the end of March but they also had a positive working capital of half a million. While very few OTC companies can boast having annual revenues of close to $17 million for TPCS that number represented a step back from the $18.23 million that were generated during the previous year. Thanks to a significant decrease of 29% in the cost of sales driven primarily by lower labor costs, lower overheads and fewer contract losses the company was actually able to nearly double its gross profit. TPCS finished their fiscal 2016 with income from operations of $2.1 million compared to a loss of $2.22 million for the previous year.

It should be noted that during the twelve months covered by the report around 2.5 million shares saw the light of day as a conversion of 1.93 million preferred shares. This, however, was the entirety of the issued preferred shares and as of March 31 the company no longer has any preferred convertible shares outstanding.

In the OTC world having solid fundamentals and showing encouraging results from your business is sometimes simply not enough to keep investors excited, though. While the interest in the stock of TPCS is significant in the days following the filing of a new report the daily volumes tend to quickly dry up. In fact, on June 23, just a couple of days before the filing of the annual report, TPCS registered a session with just 1,250 traded shares. How long will the hype last this time? It seems that only time will tell. 

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