Thursday, May 25, 2017

Titan Machinery Reports Q1 USA SALES DECLINE 17% and Lowers FY2018 EPS Guidance

Titan Machinery Chairman announces in FY2018  press release this morning that 
 "the cost savings for fiscal 2018 will be less than previously expected."

TOTAL Fy2018 Q1 US SALES Declined 17% vs Q1 Fy2017
USA Sales Declined from $157 million to $131 million

Titan Machinery (NASDAQ: TITN $15.67)
First Quarter Results 
                                    FY2015      FY2016    FY2017    FY2018
Equipment Revenue    $345m        $244m      $184m      $168m   
Total Revenue             $465m        $353m      $284m      $264m
Net Income (loss)       -($6.5m)    -($6.2m)   -($3.6m)    -($5.9m)
EPS (loss)                    -($0.31)     -($0.29)    -($0.17)     -($0.27)

Stockholder Equity                     Stock                    Market Cap
April 30,2014:  $405,000,000    $16.50 (5/2014)     $365M 
April 30,2017:  $317,000,000    $17.00 (5/2017)     $375M




Titan Closing 15 locations (20% of USA stores) and Schedules Auction Liquidations to unload inventory to raise additional cash to service debt. 
Management Agrees to Pay CoFounder (former President) $650,000 severence.

Income (LOSS) before income taxes)
FY2015: -($38,340,000)
FY2016: -($56,211,000)
FY2017: -($22,713,000)
total loss for 3 years: -($117,264,000)







Monday, May 15, 2017

Facebook: 5 year Anniversary of IPO

May 18,2012 Facebook IPO $38 @ Morgan Stanley
FACEBOOK PROSPECTUS 
May 15,2017 $150.33 
300% return in 5 years 
31% Annualized Return 5 yrs

May 18,2012 S&P 500 @ 1295

May 15,2017 S&P 500 @ 2390
85% return 5 years
13% Annualized Return 5 yrs

Check out this chart from StockCharts.com for FB



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Wednesday, May 3, 2017

TOP 50 United States Companies By Market Capitalization

October 30,2015 - April 30,2017
18 months
Equities Research: #bearish #SELL
  • S&P 500 has has gained 305 points for a 15% gain.
  • NIKE and Starbucks are no longer in top 50
  • AMZN has gained $149 Billion +51%
  • FB has gained $148 Billion +52%
  • AAPL has gained 87 Billion +13%
  • GOOG gained $143 Billion +29%
  • MSFT gained $109 Billion +26%
  • BRK gained $70 Billion +21%
  • XOM, KO are Flat
  • VZ -$3 Billion (-2%)  DIS -$10 Billion (-5%)
  • WFC -$7 Billion -2%
  • JPM gained $72 Billion +30%
  • WMT gained $44 Billion +24%
  • MCD gained $9 Billion +8%
  • IBM gained $14 Billion +10%
  • ORCL gained $20 Billion +12%
  • Home Depot gained $29 Billion +18%
Charts below from IWeblists)
 






Monday, May 1, 2017

Titan Machinery: 6th Director RESIGNS

Titan Machinery (NASDAQ: TITN) last week filed a  DEF14 with the Securities and Exchange Commission disclosing that Lead Independent Director JAMES Irwin is resigning from the Board of Directors.

SIX of Titan Machinery's Nine Directors that sat on the Board in May 2015 have now gone including the Co-Founder Peter Christenson who suddenly resigned as President after the company filed a DEF14 in May 2015.


CLOSING STORES IN USA And Focusing on Growth in Europe

TITAN MACHINERY last month the closing of 15 more locations before July 31,2017 and announced FY2018 Sales are expected to decline for Fourth Consecutive Year and the company will not be profitable for a 4th consecutive year.

The closing of 14 Agriculture Locations in the USA will bring store total to 49 USA Agricultural Locations and the closing of 1 construction location will reduce Construction Locations down to 25 USA stores.
Titan has 20 International Locations but does not break down how many are AG and Construction.

  • the 65 Agriculture Locations generated $739 million in sales in FY2017 and loss ($15,7 Million). Average of $11 million in sales per store.
  • the 26 Construction Locations generated $323 million in sales in FY2017 and loss ($5.8 million). Average of $12 million in sales per store.
  • the 20 International Locations generated $150 million in sales in FY2017 and loss ($0.5 Million) Average $7 million in sales per store.

Since November 2016 the stock has climbed from under $9 to $16 a share bringing the market capitalization above $350 million.   The Fundamentals below are from the most recent 10K. Why Wall Street is celebrating these weak financials and valuing the 100 locations at an average of over $3.5 million per location is the greatest example of a stock that is disconnected from the underlying fundamentals of its business. 









 






SOME MAJOR RISKS FROM FY2017 10K


THE TIME TO SELL WAS WHEN THE DIRECTORS WERE SELLING:

 One time Chairman of ZNOMICS (Pink Sheets, ZNOM: one for 285 reverse split: ) is also co-founder of  TITAN Machinery. But there is no mention of ZNOMICS in the biography of the  TITAN director who is up for re-election DEF14A

Cherry Tree relationship Adam Smith Fund.
According to this SEC Filing Adam Smith is disclosed as a a "PROMOTER"

Fy2017 10K FOOTNOTES: DEBT, DEBT and more DEBT

ON THE POSITIVE SIDE, 
SEEKING ALPHA Writer Doesn't See Anything Criminal or Fraudulent at Titan Machinery that will cause the Stock to Blow UP.
(I on the other hand is not as confident as that writer and have commented on his article here)

Friday, April 28, 2017

SEEKING ALPHA Writer Doesn't See Anything Criminal at Titan Machinery

This week on Seeking Alpha a writer said he did not see anything criminal at Titan Machinery.

The Contributor mentioned my name and referenced some of my notes as well.

"I'm not sure if any of these activities are criminal, I'm just not as confident as the contributor that these  activities are not criminal" - Tom Renna


Thanks for the mention.
You mention that you didn't you see anything that the company has done that is criminal so you don't see the company blowing up.
I think it would take a criminal investigator to make that decision.
For instance , has any agency ever investigated the suspicious trading in the stock prior to the 8K filing when the auditor suddenly resigned? http://tinyurl.com/kkc...
Have you or any agency ever investigated the suspicious trading in the stock on the session prior to the company issuing a press release that the company announced they were abruptly closing stores?
Has any agency ever investigated the lack of "related party transactions" disclosure regarding the construction company that has done the work building out locations. http://tinyurl.com/mya...
In the quarter that the company inflated their assets and under reported losses by 50%, has any agency ever investigated that disclosure? http://tinyurl.com/k9x...
Has any agency investigated the HYPE EPS estimates made by the Penny Stock Firm located in Minnesota (FELTL) saying the company would earn $0.37, only to see the company report a loss of over a ($1.00) 6 months later? http://tinyurl.com/ke4...
Has any agency investigated who is running Dealer Sites? You mention Dealer Sites had those lease agreements with Titan prior to going public but the percentage ownership of 30% is incorrect. It was nearly 100%. Are you aware that in 2013 they increased the lease agreement from $50 million to over $100 million?
Does anyone know how many of the stores that still remain are on properties owned by Dealer Sites? Have any of the stores that closed on property owned by Dealer Sites?
Was there anything wrong When the Chairman hyped up his stock when he was featured on CNBC Mad Money with Jim Cramer and then 30 days later he and the CEO sold 500,000 shares @ $28 (note there are only 21 million shares out).
More notes on Selling into Hype here .. http://tinyurl.com/kk4...
I am not sure if any of these activities are criminal, I'm just not as confident as you that they are not.
I can dig up more notes later to post here.
As far as risk reward in owning shares here at the $15 level, what are your thoughts?
The company this month said they were closing 15 USA stores by July 31st (almost 20% of USA locations) and gave guidance that sales will decline in FY2018 and they company would not be profitable again for the 4th consecutive year.
If they were to earn $0.05 a share in FY2019 , do you think the company deserves a Price Earnings Multiple of 300 based on FY2019 earnings estimates?
You mention that the company has available Credit of $500 Million, but that is not really true because the covenants of their Loan agreements won't permit them to exceed their current ratios.
Although you correctly note that the company "had" $52 million on Jan 31,2017, that number has declined after they paid out $15 million to WFC since that date.
There's so so much more for me to comment about this company but I have to go somewhere this morning.

Contributing to their cash flow was a gain in FY2017 from an insurance claim due to store burning to the ground.



This game has been going on for years. If you really want to see the early disclosure.



Monday, April 17, 2017

Five Titan Machinery Directors Gone in Two Years

Of Titan Machinery's 9 directors that sat on the company's board in May 2015, only 4 remain.

NEXT DEF14 DUE OUT SOON.
APRIL 2013 DEF14 : Most OverPriced Stock Titan Machinery Files Proxy Statement

The 9 Board of  Directors in April 2015 
 The 8 Directors as of April 2016

The 8 Directors as of April 2017
  





Wednesday, April 5, 2017

SEC Comments Will Effect Titan Machinery's Upcoming 10K

Before you step into the 2017 SEC Comment Letters and if you are  new to TITAN MACHINERY (NASDAQ: TITN) colorful stock trading, you can click here to see the history of BIZARRE hype. 
Including, but not limited to: 

           

On January 26,2017 the Securities and Commission's Division of Corporate Finance sent the following Comment Letter to Titan Machinery after a review of the Company's FY2016 Annual 10K filed back in April 2016.
The Comment Letter requested clearer and more transparent disclosure regarding Titan's Adjusted EBITDA, Inventory and Wells Fargo Credit Agreement.
On February 9, 2017 Titan filed a Correspondent in response to the SEC comment letter and agreed to make changes regarding each disclosure.
Ironically, also on February 9,2017 Titan filed an 8-K with the SEC announcing that they would be closing 15 locations and gave gave guidance to the street regarding their FY2017 Sales and Earnings which were originally expected to be announced on March 30,2017.
What's is so strange is that FY2017 ended on January 31,2017 and the company's guidance regarding  the FY2017 top line sales number were lower than the Actual Number that was reported on March 30,2017 causing the company to BEAT THE TOP LINE on the morning of the Year end press release.
What's even more bizarre is that the company expected to lose ($0.20) but instead loss ($0.31). The Top Line Beat was celebrated by Wall Street sending the shares up from under $13 on Monday to close the week above $15 at a $330 million market capitalization.

Chart is an image from BigCharts.com 

In April 2014 Titan Machinery shares traded @ $15.50 and the company reported FY2015 sales of $2.2 Billion and the company was profitable.
Over the last 3 years since April 2014 the company has reported losses for a combined ($84 Million) and recently announced FY2017 Sales of less than $800 million in equipment for the entire year.
Meanwhile the Stock closed yesterday @ $15.50 and remains at a $300+ million market capitalization.

So What drove the stock higher? Was it FY2018 Guidance? 
CEO David Meyer on the conference call last week WARNED THAT Agriculture and Construction EQUIPMENT SALES WILL FALL FURTHER IN FY2018!!!

READERS at SEEKINGALPHA are asking "WHAT IS SUPPORTING THE STOCK?"


After doing some Digging to find out what was catalyst to drive this thinly traded Titan Machinery micro cap stock with a mere 21 million shares outstanding skyward. 
I am not a subscriber to TheStreet.com Real Money services but I did find someone who profited from buying the TITAN SPIKE and congratulated Real Money author REVSHARK on twitter.













Check out this chart from StockCharts.com for TITN

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