Should you still buy Technical Communications Corp. (TCCO)?

TCCO Stock went soaring today (10 December, 2019) to astronomical heights. More than 350% in the plus, it’s a number you won’t see often on the market. What caused this extraordinary increase in the TCCO stock price? In a press release released yesterday, TCCO reported its results for the full year and quarter, some key points from the report:

  • Quarterly Revenue – For the fourth quarter, the comapny reported revenue in the amount of $2.749 million. This figure came in well ahead of the revenue reported one year earlier in the amount of $1.137 million.
  • Quarterly Net Income – In terms of net income, the company is in the profit, generating net income of $1.032 million in the quarter. That works out to $0.56 per share. In the same quarter last year, the company generated a net loss of $259,000, or $0.14 per share.
  • Annual Revenue – Revenue for the 2019 year came in at $7.024 million, smashing the $3.685 million that was reported last year.
  • Annual Net Income – Finally, for the full year TCCO generated net income in the amount of $631,000, working out to $0.34 per share. In the 2018 year, the company generated a loss of $1.48 million, or $0.80 per share.

As you can see from the numbers, the name of the game today is a return to profitability. In a statement, Carl H. Guild, Jr. President and CEO at TCCO, had the following to offer: “The company experienced a return to profitability in fiscal year 2019. The company completed delivery of several foreign and domestic contracts for its dsp 9000/hse 6000 radio encryption products. It also provided significant engineering services under contracts that were completed in fiscal 2019. Offering high-end custom cryptographic services and solutions is an established market niche for the company and we believe an important competitive differentiator. In fiscal 2019, custom tcco equipment and services continued to provide recurring revenue opportunities within the company’s established government systems product line; such equipment sales consisted primarily of our dsp 9000/hse 6000 radio encryption and digital encryption cx7211 products, along with custom solution engineering services.”

So should you still invest in TCCO at this point? The numbers are good, they’ve had a great quarter and year. However this meteoric rise that is happening today is a dangerous thing. It makes TCCO stock very unpredictable for the shorter term. In our personal opinion we would hold off on buying TCCO stock at this point and would advise you to wait until the dust has settled. However we still encourage our readers to do more research and not base their investment decision solely on our words. A well informed investor, is a good investor.

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