Trans-Pacific Aerospace Company (OTCMKTS:TPAC) Still Surging

Trans-Pacific Aerospace Company (OTCMKTS:TPAC) has become one of the most talked about names on the OTC markets. Driving shares higher is due to multiple factors. First is TPAC is buying back its own stock. This illustrates the forward thinking of TPAC's management. While most other bulletin board companies are diluting shareholders with toxic financings, TPAC sees the value in its own shares and is buying them back. TPAC has in place a 1.8 billion share repurchase program and has to date repurchased 700 million shares. CEO Bill McKay said in December:

“Earlier this year we committed to our shareholders that we would repurchase shares of TPAC common stock, thereby reducing the float. This is one of several objectives that we have laid out for TPAC and we are very optimistic that in the coming weeks and months we will make good on other commitments made to our shareholders, including purchase orders and acquisitions. We will acquire as many common shares as possible, so as to obtain a more manageable share structure and float and thereby truly reflect the value of the Company. I would like to personally thank the shareholders who have shown remarkable patience and faith in TPAC and our objectives. We are optimistic that we will acquire more shares and when we do so, we will announce the retirement of large blocks through future press releases and/or Twitter posts."

It usually takes an activist investor like Carl Icahn to prod management to buyback stock, but with TPAC, management is doing so without an activist pushing the company. Share buybacks are great for shareholders because after the share buyback, existing shareholders will own a bigger portion of the company, and therefore a bigger portion of its cash flow and earnings. Furthermore, CEO Bill McKay is clearly indicating to the market that he see TPAC shares as being undervalued at current levels. This shouldn't come as a surprise to investors that have been following TPAC. Last August, Kinsley Street Investors Group came out and said that TPAC was "grossly undervalued."Second, TPAC is one of the most exciting names in the aerospace market. It's not often that we find an aerospace company trading below a penny with the potential that TPAC has. Just looking at the company's description gets one excited.

TPAC uses its proprietary aerospace bearing technologies at its facility in China to manufacture and sell component parts for both new commercial and general aviation aircraft and for spares for the existing commercial fleet. The component parts are referred to as self-lubricating spherical bearings and they help with several flight-critical tasks, including aircraft flight controls and landing gears. TPAC is the first and only manufacturer in China to qualify under SAE-AS81820 and 81934.

TPAC's bearings are qualified by the U.S. Navy to SAE standards and TPAC is listed on the Navy's Qualified Products List. This NAVAIR qualification is accepted worldwide as the industry standard for bearings. TPAC's products serve the aviation, space and maritime industries.Last month TPAC got a purchase order from a Chinese aerospace manufacturer for specialized self-lubricating bearings to be used in the Chinese commercial aerospace sector for production purposes. CEO Bill McKay said of the deal:

“This is a significant event for TPAC. The order, which is in excess of $100,000 represents far more than the monetary value thereof. We have worked very hard in the development and marketing of these bearings and are the only company in China able to meet the exacting blueprint requirements for performance. While it has taken a long time from product development to sales, our patience and efforts have been rewarded. We have seen over the past several months an increase in aerospace production and buying in China and are optimistic that we will become an integral part of this domestic expansion. Due to business practices and considerations, neither the project, the name of the customer nor the terms of the contract will be disclosed. We will continue our Chinese domestic marketing efforts and are making progress in expanding our marketing into North and South America and Europe with major aerospace OEMs and sub-tier contractors.”

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TPAC is an exciting name in penny stock land. However, the company has a history of losses and a lot still needs to be done to keep the momentum going. So far the market is liking what it's seeing and the moves CEO Bill McKay is making. To get the latest updates on TPAC and all of our other hot stock picks, sign up below!

Disclosure: We have no position in TPAC long or short and we have not been compensated for this article.