Technical Communications Corporation – How To Profit From Trump’s $700 BILLION Spending Spree
If high-tech military equipment, innovative products, and $100+ billion-dollar government contracts excite you, check out the explosive potential of this defense stock.
Our intensive research and extensive due diligence have uncovered Technical Communications Corp. (NASDAQ: TCCO), a leading provider of superior-grade secure communications systems and customized solutions to protect highly sensitive voice, data and video transmitted over a wide range of networks. The company’s high-tech product line covers three critical areas:
- Data & Network Encryption – The CipherX® family of network security devices provides strategic-level communications security for global networks, with scalable solutions from 100 Mb/s to 10 Gb/s.
- Secure Radio – The DSP 9000/HSE 6000 radio encryption products military communications over HF/UHF/VHF channels with exceptional recovered voice quality.
- Secure Mobile/Telephone – The CipherTalk® secure mobile phone/encryption and CSD 3324 SPV Secure Voice Telephone Encryption systems provide military-grade end-to-end encrypted voice and text communication.
Government entities, military agencies and corporate enterprises in 115 countries use TCC’s proven products to protect their most delicate and important communications.
And in the military world, secure communications are a HUGE DEAL.
That’s because cryptographic technology ensures safe communication for military operations of ENORMOUS importance – including ballistic missile launches, nuclear submarine deployments, army troop movements, airforce manoeuvres and much more.
And today, the U.S. and other governments worldwide are desperately scrambling to secure their military communications from the new threats posed rogue states (think Iran/Russia/North Korea), terrorists (think ISIS), and cyberhackers.
The result is that spending in the global military communications market is skyrocketing, with an expected growth from $30 billion in 2018 to over $41 billion by 2027.
And TCCO stands to gain up to 400% by providing the solution.
Trump & The Defense Sector – Adding Fuel To The Fire
The Trump presidency has so far proven to be an absolute goldmine for defense stock investors. The sector has gained 30% in value since his inauguration in January 2017 compared to only 18% for the S&P 500 Index.
And this is definitely not by chance – because the 2019 defense budget Trump signed authorised $716 billion in defense spending – the highest amount in U.S. history.
On March 11th the 2020 budget proposal was unveiled, with a proposed increase of the defense budget to $750 billion, a further 5% increase and another all-time record.
And that’s not all – because military communications are taking a front seat in this spending boom. The reason for this is pure military logic. According to top experts, China consider’s America’s greatest weakness to be its military communications systems – which would make them a primary target for attack in case of war.
This is why the Pentagon is boosting spending on the communications, electronics, telecommunications, and intelligence (CET&I) technologies segment of its budget faster than any other segment – a 12.3% increase in 2019 spending over the 2018 figure.
In addition, many of America’s top allies, including Israel, Turkey and Saudi Arabia, are also focusing on military communications equipment to counter the threat of ISIS. A $110 billion U.S. defense deal with Saudi Arabia signed in 2017, which could be worth up to $350 billion by 2027, is likely to propel positive sentiment – but the party is just getting started…
Because analysts are forecasting defense spending in the US to climb to $798 billion by 2022. And the rest of the world is adding fuel to the fire – global defense spending jumped by 4.9% in 2018 to $1.78 Trillion, adding further upward pressure on defense stocks.
Defense Stocks Are About To Make Investors A Fortune…AGAIN
The truth is that when defense stocks move, they move up BIG. Uptrends have happened again and again through history, like clockwork – and they are always driven by government policies:
- Back in the 70s, legendary investor Jim Rogers made 100x his money on Lockheed, when the US government starting spending more on electronic warfare systems.
- In the 90s, billionaire investor Warren Buffett made more than $3 billion in profits by investing in General Dynamics, as the company refocused its product strategy following the end of the Cold War.
Today, history is about to repeat itself once again – with some niche defense stocks ready to give astute investors triple digit % returns.
TCCO – An Appetising Target For Defense Giants
Dynamic defense companies regularly become appetising acquisition targets for the sector’s giants. Almost $60 billion was spent in M&A activity in 2018, 83% higher than the 10-year average and the 3rd largest figure in history. More and more often competition between companies in the same defense niche ends up in only two ways – a merger or an acquisition of the smaller company by the larger one.
M & A activity in the defense sector has been however plagued by an ongoing problem – there are too few acquisition targets. Major players are meanwhile limiting their own R&D spending, which means they are forced to buy innovative technologies. Deloitte foresees aggressive acquisitions of companies with niche products to become a major driver of M&A activity.
General Dynamics Corporation (NYSE: GD)
Market Cap: $49 BLN
General Dynamics revenues totalled $10.5 billion in Q3 and $36.2 billion in 2018. The company is a top shipbuilder for the Navy and a top provider of land weapons systems too, building the Abrams tanks, the Stryker family of vehicles, and Light Armored Vehicles. In April 2018 it bought military/government IT security company CSRA for $9.6 billion.
Northrop Grumman Corporation (NYSE: NOC)
Market Cap: $46 BLN
Northrop Grumman’s revenues were $8.2 billion in Q4 2018 and $30.1 billion in 2018. In June 2018 the company purchased Orbital ATK, a producer of rocket propulsion systems, for $9.2 billion.
Raytheon Company (NYSE: RTN)
Market Cap: $50.8 BLN
Raytheon had revenues of $7.4 billion in Q4 and $27.1 billion in 2018. The company builds the Patriot missile defense system along with the interceptors for the Aegis air defense system. It is also the world’s largest producer of guided missiles, among which the Tomahawk cruise missile. Raytheon is also a leader in radar systems and electronic warfare.
Lockheed Martin Corporation (NYSE: LMT)
Market Cap: $83.9 BLN
Lockheed’s revenues were $14.41 billion in Q4 and $53.8 billion in 2018. The company is the world’s largest defense contractor and the producer of F-22 and F-35 fighter jets. Lockheed also produces Sikorsky military and civilian helicopters, as well as a variety of missiles and fire control systems.
HEICO Corporation (NYSE: HEI)
Market Cap: $11.4 BLN
HEICO’s revenues were $0.48 billion in Q4 and $1.78 billion in 2018. The company is a niche player in the aerospace, defense and electronics industries. It is an provider of FAA-approved aircraft replacement parts, aircraft accessories component repair & overhaul services for avionic and electro-mechanical applications. The company is pursuing a growth by acquisition strategy, acquiring 5 companies in the last 12 months.
But that’s still not the whole story…
Small Cap + Cheap Valuation = High Profit Upside
Today there is approximately $750 billion invested in defense stocks in the US alone. As TCCO has a market cap of only $5.3 MLN, it would just take a minimal shift in these funds toward TCCO stock to propel it much higher, and extremely quickly. This can happen when suddenly investors realise a company’s potential, often after a news release…
And News Releases Can Be EXPLOSIVE.
A $2.37 Million order from Datron World Communications for TTCO’s DSP 9000 radio encryption equipment in 2016 pushed the stock up 37% in one day. It is important to remember that defense stocks move in cycles – powerful uptrends push prices up a lot in little time. In 2017 alone TCCO shares rose from $2.35 at the start of the year to more than $12.25 by the end of it – a gain of more than 400%.
With a current price of $3.05, a TCCO shareholders stand to multiply their investment fourfold from the current price if TCCO just returns to its 2017 highs.
And the stock looks very undervalued too.
At the end of Q3 2018 the company had $1.98 million in cash and cash equivalents on hand, more than handily covering its total liabilities of $0.5 million. Also, with a book value of $3.6 million and a market cap of $5.6 million, the price/book ratio of the company is only 1.56x compared to 5.75x for the defense sector – a significant discount.
By buying TCCO stock an investor is literally getting the company’s high-tech product line, established customer base, and potentially market-dominating products – almost for free.
TCCO – Ready To Reap The Rewards Of A Booming Trillion-Dollar Industry
Everything is aligning perfectly to make the TCCO the next big winner in the defense sector. By buying TCCO stock you are getting:
- A company founded in 1961 with solid and long-dated connections in the U.S. defense sector – fundamental in winning new contracts
- A profitable and growing business with revenues up 26.1% in 2018
- Excellent brand recognition and clients in 115 countries worldwide
- A play on a burgeoning defense sector with even faster growth for military-grade communications equipment
- A bargain valuation – 1.56x book value, with no ST or LT debt
- An extensive portfolio of over 17 patents for innovative products and ISO 9001 certification since 1995
- The potential of a takeover by a defense company wanting to secure a foothold in the military-grade communications niche
The window to act on it is still open – for now.
If you get in today you are getting in before a spectacular run that could multiply the stock price by 3 times or more. This is truly a one of a kind money-making opportunity in the defense sector for savvy investors – make sure you are one of them.