Robust revenue growth and aggressive expansion into new markets, at the peak of the COVID-19 pandemic, explain why Transportation and Logistics Systems Inc (OTCMKTS:TLSS) is a potential microcap runner. The stock is the subject of renewed investor interest, depicted by a spike in trading volume to levels not seen before.
OTCMKTS:TLSS Price Action Analysis
Cost reduction as part of a restructuring drive aimed at reducing debt and streaming overhead have gone a long way in strengthening market sentiments. Likewise, investors have started pushing the stock up the charts on management, affirming the company is well-positioned to respond to new organic growth opportunities going forward.
A 100% plus rally, over the past one month, from one-year lows, might as well signal the tide is changing in favor of the bulls. Buying pressure is increasingly building up as the stock appears to be trading at a great discount relative to its tremendous long-term prospects.
A spike to the $0.03 level has opened the door for the stock to make a run for the $0.06 level as part of a long-running trading range of between $0.01 and $0.06. A breakout above the trading range should reaffirm the emerging bull trend.
Conversely, Transportation and Logistics Systems needs to rise and find support above the $0.06 level. Any sell-off from current levels would have to contend with support at the $0.01 level.
Transportation and Logistics Systems bills itself as a leading logistics and transportation company focused on e-commerce fulfillment. The company offers last mile, two-person home delivery, as well as line haul services for some of the biggest online retailers in the U.S.
OTCMKTS:TLSS is a potential bounce-back play having emerged that the company is enjoying booming business amidst the COVID-19 pandemic. The pandemic has triggered a significant change in consumers’ shopping patterns. With the stay at home policy in place to combat the spread of coronavirus, people have resorted to shopping online and having their goods delivered at their doorstep.
Transportation and Logistics Systems has since experienced a spike in demand for its ecommerce fulfillment services as an online retailer’s race against time to ensure goods are delivered at the customer’s doorstep. Impressive first quarter preliminary financial results affirm the fact that the company enjoyed booming business amidst the COVID-19 fallout.
The logistics and transportation company says it is on course to report a 49% increase in revenue for its first quarter. Revenues are believed to have increased from $2.8 million to $8.6 million in Q1 2020, compared to $5.8 million reported last year the same period.
Robust revenue growth can be attributed to, among other things expansion into new markets of Florida, Georgia, Ohio, and Tennessee. Similarly, Transportation and Logistics Systems did secure new sales opportunities that went along in strengthening its revenue base. In addition, the company had a full quarter of box-truck line business starting February that went a long way in affirming revenue streams.
An increase in online ordering among major online retailers as a result of the COVID-19 pandemic went a long way in fuelling a strong quarter for Transportation and Logistics Systems. Buoyed by the first quarter performance Chief Executive Officer, John Mercadante, has confirmed they remain on course on the restructuring plans.
In March, the company achieved a significant milestone as part of its cost-cutting measures that resulted in the reduction of annualized, operating, administrative, and corporate expenses to a tune of $1 million.
“As the Company continues its aggressive restructuring efforts to reduce debt and streamline its overhead, our highly talented operations team, that has extensive ecommerce experience, is keenly focused on generating new, higher-margin revenue,” said Mr. Mercadante.
Transportation and Logistics Systems is well-positioned to respond to new organic growth opportunities while capitalizing on the growing e-commerce revolution. The company already has three fully operational warehouse facilities located in some of the most densely populated portions of the country.
The company also boasts of a hybrid employment structure that affords it the ability to scale rapidly during the seasonal spike in volume without incurring extraneous costs.
OTCMKTS:TLSS is a fundamentally attractive investment amidst the booming e-commerce business, fuelled by the COVID-19 menace. The leading e-commerce fulfillment service provider is experiencing thriving business that should see it deliver stellar financial results going forward. Conversely, the stock looks set to continue rising amidst improving underlying fundamentals.
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Disclosure: We have no position in OTCMKTS:TLSS and have not been compensated for this article.