lundi 7 novembre 2016

Tucows (TC.TO) beats the estimates once again

Probably that tomorrow, Tucows (TC.TO), will go down on the market. Why? Because once again the estimates were beaten (actual 0,45$ VS estimated 0,36$). And last time Tucows did that, the stock went down.

But, frankly, it may go down like a rock thrown in the water, that stock is still a fucking buy in my opinion.

Take a look at the recent earnings per share of the stock:

2013: 0,37$
2014: 0,54$
2015: 1$
2016: 1,65$ (my personal estimates)

Is it any stock out there that is not too expensive and that offers such a high growth and high ROE? That stock is selling at about 18 times this year's earnings. It's probably less than 13-14 times next year's earnings. And the ROE is higher than 50.

The only problem (which is not a major concern) is that the debt is still a little high. But it doesn't grow as fast as the earnings, which makes me feel good.

Like I feel after having some tasty marijuana muffins.

6 commentaires:

  1. Tucows growth looks good, might be fairly priced here with the multiples though. What are your thoughts on linamar. I can't figure out if investors hate auto stocks or if there's something I'm missing here. Growth in top and bottom line continues to be strong and margins look great.

  2. I really like Linamar. Bought more after the last results. I don't understand the market.

  3. The market almost never puts a high p/e multiple on the auto sector. there is also a belief that we are at the top of the cycle. It may not apply to all suppliers, but that is the perception. Perhaps you have heard the term "peak auto" thrown around this year. If you have not heard the term, just google "peak auto"

    1. I've read about peak auto numerous times. Linamar continues to show great results, much better than auto dealers like Carmax.

      At 6-7 times earnings, I don't worry too much about the possible but not certain end of a cycle.

  4. Yeah I heard of peak autos. The question is does it matter if a company is still growing through gains in market share. Linamar also isn't solely an auto supplier. But I digress, i suppose the market is currently in a voting machine mode.

  5. I wouldn't be worried about Tucows debt either. The largest part of their debt +/- $78m isn't really borrowings at all it is "deferred revenue". This is money they collected from their customers already but they are yet to deliver their service. People prepay for their domain name for a period and Tucows holds onto the cash as a "deferred revenue" liability until they can reclassify it as revenue. Tucows can use their money to invest in their business