👷 $TBLT – 𝘼 𝙢𝙪𝙡𝙩𝙞𝙗𝙖𝙜𝙜𝙚𝙧 𝙬𝙞𝙩𝙝 𝙖𝙩 𝙡𝙚𝙖𝙨𝙩 𝟰𝙓 𝙥𝙤𝙩𝙚𝙣𝙩𝙞𝙖𝙡 𝙖𝙣𝙙 𝙜𝙧𝙚𝙖𝙩 𝙛𝙪𝙣𝙙𝙖𝙢𝙚𝙣𝙩𝙖𝙡𝙨. ⚒️
TBLT has been on my radar for some time now, but I have just increased the exposure to almost 3% of the portfolio, which is my max for the company of such small size. They operate in a very important niche and their Revenue is getting very close to its Market Cap. What is more, their short interest is very low and relative value incredibly high. Let us look closer into the business:
Toughbuilt Industries, Inc. is engaged in designing, manufacturing, and distributing tools and accessories to the building industry. The Company distributes various home improvement and construction product lines for both Do-It-Yourself (DIY) and professional markets under the TOUGHBUILT brand name.
Its major product line is the soft goods line, which consists of approximately over 100 variations of tool pouches, tool rigs, tool belts and accessories, tools bags, totes, variety of storage solutions and office organizers/bags for laptop/tablet/cellphones. Its second major category of product line is the metal goods, which consists of sawhorses and work support products with design and construction targeted for the discerning users in the industry. Furthermore, it includes several stands and work support products. (Source: Refinitiv)
TBLT employs 52 people and is Headquartered in Lake Forest, CA, in the US. Let us look at the most important valuation metrics:
🔹️ Market Cap of $65.1M
🔹️ Revenue of $56.8M with FY1 of 58M and FY2 of 73.5M
🔹️ Revenue growth 47.08%
🔹️ Short Interest at 3.05% (!!)
🔹️ Debt to Capital at 0% (!!!)
🔹️ Cash of 20M (!)
Revenues come from the US in 78%, Europe at 8%, as well as Australia 5%, Canada 5% and 4% for Other. The biggest Institutional Investors is The Vanguard Group at 2.68%.
🔹️ TBLT Issues Earnings Results, Missed Expectations by $0.03 (17.08.2021).
🔹️ Toughbuilt Industries EPS misses by $0.03, beats on Revenue (16.08.2021 – Seeking Alpha).
🔹️ Toughbuilt Industries Q2 Revenue Rose 132% to $15.9M (16.08.2021)
🔹️ Launches New Product Two in one Scraper and Utility Knife (03.08.2021)
🔹️ Is Toughbuilt Stock A Good Stock to Buy or Sell? It’s a Huge Gamble, So Probably Both (23.07.2021 – Seeking Alpha)
🔹️ Toughbuilt Industries Announces $40M Registered Direct Offering at $0.869 per share (12.07.2021)
As you can see above, TBLT is a fundamentally strong small cap business that operates in the DIY industry, which is an important one during and after the pandemic. Its share price has been hammered by the $40M share offering (at almost double the current price) and recent miss on EPS (by only $0.03). The company has beaten revenue forecast and its current Price Target is $2 which is 297% Upside from the current price, or around 4X.
Importantly, the company has no debt and could be an interesting acquisition target as well. Its 52w High is at 1.78 whereas 52w Low is 0.49 or the price yesterday. It must be noted that it is a penny stock at this stage, thus caution needs to be applied, but I believe we will at least 2X until the EOY.
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