Ann: New Maintenance Software Supply Contract-TCN.AX, page-8

Hi Klogg,

Well done on buying into TCN. I have had this on my watch list along with a few other small caps I thought were significantly undervalued (Alex from shareidea and ewfunds put me onto this idea via a response he gave to another poster - under the RUL ticker I think). Anyway with at least a few weeks to go before our SMSF is active and our other portfolio fully invested, I think this horse has bolted for me.
I am sure you have done your own comprehensive due diligence, but for anyone who is interested here is a bit of data I was putting together in Excel (amounts in millions $). Not complete…….

		2016	2015	2014	2013
1	Column1	2016	2015	2014	2013
2	urgent
3	revenue	4.8​	5.78​	5.26​	3.48​
4	operating expenses	-4.83​	-4.47​
5	net	-0.03​	1.31​
6	ERST
7	revenue	3.73​	3.29​
8	operating expenses	-1.7​	1.6​
9	net	2.03​	1.69​
10	stat seeker
11	revenue	2.86​	2.59​
12	operating expenses	2.21​	-2.57​
13	net	0.65​	0.02​
14
15	TCN share	0.64​	0.19​
16	office	-0.79​	-0.73​
17
18	tax	-0.27​	-0.25​
19	total	1.58​	2.2​
20
21	loans to stat seeker	1.76​	1.31​
22	cash	3.83​	4.31​	3.69​	3.67​

I think TCN was very cheap in the 50’s and possibly good value now as well. Even now, once cash is taken out of the current 15.5m market cap you are left with about 11.5m (add back 50% of loans to stat seeker and it is even cheaper). Considering earnings over the last 3 years have averaged around 2m, this looks like good buying.

Anyway Klogg I am sure you have got all of this data and more. I will keep watching but if it moves up another 10/20% that juicy margin of safety TCN provided will have shrunk. Personally I don’t think this announcement has made the company 21% more valuable (though the point could be argued). Rather, I just think this was a value opportunity with a severely depressed price and buyers have been given a nudge by this announcement – I know I would have been, were I in the market.

PS. Interesting point on Stat Seeker.

Andrew