Tuesday, April 9, 2013

Titan Machinery Reports in Morning

Titan Machinery is headquartered in the Heart of America and employs over 2,000 employees. Titan has a $500 million market capitalization has consistently reported great earnings quarter over quarter for years. Based on the company's earnings per share and low price to earnings multiple the stock looks very attractive for a long term investor.

After digging deeper into the fundamentals though, the company has continued to increase inventories and debt. What really concerns me is the "statement of cash flow" which has reported negative operational cash flow over the years.

Yesterday there was 3 bullish articles written about the stock, (2 by Motley Fool and another by TheStreet.com). Both articles were very shallow regarding the actual obstacles that TITN's business model is facing. TheStreet pointed out that TITN has a 24% short interest ratio and was speculating a good earnings report on Wednesday could send the stock much higher through a short squeeze. Motley Fool and TheStreet may both be right, but I advise people to also be AWARE of the Risks.

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