Tucows does it again- another solid quarter

      Workathon is the blog I use for new subjects and to explore new areas or new companies.This post is dedicated to a company not previously covered by either of my two Blogger blogs. Tucows is an uprising Canadian technology stock trading at about $42 a share. On November7 Tucows released it's third quarter results;they were substantially better than most of it's competitors.In particular,the results were better than that of Kinaxis, another Canadian company with a much larger market capitalization.                        

   How do the Numbers Look?
     (a)Earnings
        For starters Tucows had positive earnings per share while Kinaxis is still showing  negative earnings and e.p.s.Tucows had a 55% increase in e.p.s over 2015 at a record of $.45 per share.It's P/E ratio was high at 25 times but for a software company was remarkably low.Shopify, for example, shows a P/E ratio of 55 times.And Kinaxis has a P/E ratio of  -(464).Tucows only shows a modest growth of revenue at 11% but adjusted EBITDA grew by 48% over 2015 to $8.6 million.
     (b) Growth
   It's two main products are Ting Mobile and it's domain services for the internet.Their Ting Mobile services are expanding in the United States every month.But Tucows is always on the look for a new acquisition.As it has contacts and connections with other Canadian internet services.This blog expects this side of it's business to show growth in 2017.
     (c) Assets
   Both Tucows and Kinaxis have a similar  asset base;both have slightly less than $130 million in assets. But as most investors know the amount of assets are not so important to a software company.More important is the market value of these assets or the market capitalization.Here is where the two differ to a large extent;Tucows has a market capitalization of about $440 million while Kinaxis has a market capitalization of about $1.6 billion or four times the size of Tucows.
      Going Forward
    Tucows does need greater revenue increases;it is still behind Shopify in this category.And revenue growth was only about 11% in this quarter.A reasonably small tuck-in acquisition would be a good idea at this stage of their development.However their earnings and earnings growth are solid;here they are better than their competitors.As this author has mentioned in other blogs Tucows' float is quite small and less than Kinaxis and Shopify.A small rights offering or a secondary equity offering would be beneficial over the long term.But Tucows' basics are solid and investors should realize that this stock is quite a bargain at these prices; this blog sees it trading in the $50 range by Christmas.All it needs is one more good quarter and it will be there.                         use Workathon for analysis of internet stocks  ;use Workathon for business consulting