Has Canada seen a more compact and dramatic rags-to riches-to rags story than that of Timminco? The spectacular rise and fall of the Toronto based solar-silcon and silcion metal producer seems to be torn from the pages of a Hollywood script or Broadway musical.
In late 2006, Timminco shares were worth pennies, closing that year at $.30. The stock hit nearly $34 two summers ago. In between was a time when The Company claimed it had developed a new process to purify silcon for use in solar panels. If they were right, investors surmised, the ramifications were absolutely massive.
On the other side were those who felt the technology Timminco claimed to have invented was too good to be true, a belief that was no doubt furthered by the fact that The Company was extremely secretive about the process and even its customers. Each side had its champions; in April of 2008, Ravi Sood of Lawrence Asset Management (now Navina Asset Management Inc) appeared on BNN, saying that “There is no evidence that they have any sort of proprietary technology. There is no evidence that they can actually deliver on their claims”. Notorious Wall Street short stock seller, Manuel Asensio, joined in and began openly shorting Timminco. Jean-Francois Tardif and Peter Hodson, whose firm Sprott Asset management held a large position in Timminco, issued buy recommendations on the stock.
With Timminco trading at pennies again has this story met its finale or does the stock now represent a value? The Company has strung together a few quarters of steadily improved sales, and a quick look shows that the stock now passes the most basic of screens for value investors, as it trades at under one times sales. We break down the rest of the numbers in an updated “Quant Snapshot”.
1. Price to Sales: .84 x sales
As of Friday, August 13th Timminco had 195,734,769 million shares outstanding. The price, as of the same date, was $.475. This gave The Company a market capitalization of $92.97 million. In the trailing four quarters Timminco posted sales of $109.63 million.
2. Cash to Market Cap: 1.61%
As of Q2, 2010 (June 30th, 2010) Timminco had a Cash and Short Term Investments position of $1.5 million. The Company’s Market Capitalization, as of Wednesday, August 11th was $92.97 million.
3. Debt to Market Cap: Zero
As of Q2, 2010 (June 30th, 2010) Timminco had a Long Term Debt position of $7,000.
4. Three Year Growth: -11%
Revenue was $181.81 million in FY 2006. This fell to $104.57 million in FY 2009.
5. Enterprise Value to Sales: .87 X Sales
Timminco’s Enterprise Value is $91.4 million, based on a market capitalization of $92.97 million, plus Long Term Debt of $7,000, minus Cash and Short Term Investments of $1.5 million. In the trailing four quarters, sales totaled $109.63 million.
All financial information about Timminco is gleaned from
their filings with the System for Electronic Document Analysis and
All calculations are based on The Company’s closing share price as of
close August 13th, 2010: $.475
Sales from trailing four quarters: $109.63 million
Cash and Short Term Investments as of Q2, 2010 (June 30th, 2010): $1.5 million
Shares outstanding: 195,734,769