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More Big Moves In Tempus Applied Solutions Holdings Inc (OTCMKTS:TMPS)

More Big Moves In Tempus Applied Solutions Holdings Inc (OTCMKTS:TMPS)
Written by
Jarrod Wesson
Published on
March 15, 2018
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It has been a fantastic month for Tempus Applied Solutions Holdings Inc (OTCMKTS:TMPS), as its price took a turn for the better. Over the course of March, the share price has risen from $.15 to over $.35; 100% stock returns. Company Logo - TEMPUS APPLIED SOL OTCMKTS:TMPSWith such incredible numbers, we decided to review the stock closely and assess whether the stock price spike is sustainable and whether an upward trend is going to continue in the next weeks.Please check the company’s price in the chart below: 1-month chart for TMPSBefore providing the most recent announcements, let's revise the background of TMPS for starters. Headquartered in Williamsburg, Virginia, the Tempus provides turnkey and customized design, engineering, modification and integration services as well as operations solutions that support aircraft critical mission requirements for various international customers including the United States Department of Defense, other U.S. government agencies, foreign governments, and heads of state.What's making the stock spike?Honestly, the company has been giving signs of ticking higher since August 2017, when the market got to know the definitive purchase agreement for the acquisition of six Lockheed L-1011s, formerly owned and operated by the Royal Air Force (RAF) of the United Kingdom. Those who have stayed tuned to the announcements should have been able to receive stock returns.With this new transaction, TMPS was trying to capitalize on a potential solution for the shortage of AAR services that currently exist within the US Navy and Marine Corps tactical aviation and many NATO/Allied air forces. While the acquisitions had not closed, it was obvious that it meant a lot for TMPS, as it was going to issue approximately $3.5 million in stock to the seller. The following are, in our opinion, the most significant details of the assets to be bought:

"Four of these aircraft are specifically configured for air-to-air refueling (AAR) operations and the remaining two are configured for passenger and cargo operations only. Although the aircraft served the RAF and NATO for 30 years until their retirement in 2014, the aircraft have many years of service life remaining. The L-1011s have been in flyable storage in the UK since their retirement. " Source

That was not all. The month of August 2017 was a busy month for the company, as it also released its Q2 earnings results. Tempus delivered in excess of $300,000, or $0.03 per share in operating profit versus $1.10 million loss and negative $0.12 per share for the same period in 2016. The optimism was at its highest level inside the company. Read the reaction of Tempus CEO Scott Terry:

"The Company is confirming its ability to achieve profitable operations due to the combination of quality revenue and rightsizing the organization to manage the existing revenue. We are looking forward to more opportunities during 2017 as evidenced by the recent agreement to acquire the L-1011 aerial refueling aircraft." Source

As said previously, the market did not react to the positive news in 2017. The market needed to wait until March 2018 to recover the stock gains. In our view, those who remained patient and knew how to read between the lines received the gains here.On March 12, 2018, we learned that after the company inspected the aircraft, the acquisition of the six Lockheed L-1011s had been completed. As a result, the company had issued 6,730,769 common shares to the seller and had agreed to either pay $150K in cash or stock to reimburse for the maintenance and storage costs. Please note that on the same day, the share price spiked up, as the market celebrated the news.What next?As noted in March, with the new equipment in hand, TMPS will now focus on attending military customers in the USA, and NATO. We will be expecting new air-to-air refueling services service agreements with clients, which may make the share price continue its upward trend.There is more.We could read in August 2017 that the company continues to "explore opportunities to add shareholder value through organic growth and potential acquisitions." Since the company did not say in 2018 that the plans are changed, we will still be expecting new corporate moves. Be sure to stay tuned, since a merger could help enhance shareholder value and could trigger the stock price. It is another serious catalyst on this name.ConclusionCurrently trading with a market cap of $8.3 million, TMPS is an exciting story among small caps. With AQR Capital Management, LLC, AQR Capital Management Holdings, LLC, and CNH Partners, LLC, still sponsoring TMPS, we continue to believe that this ticker is a must-follow. For starters, get to know that these players are helping the company with the acquisition of $.29 million in stock, or 3.53% of the total outstanding shares. Their positions in the stock is another very relevant feature to look at in the near future. It shows that they have confidence in the future performance of the stock. Finally, please also note that this is also a low float runner, which may exhibit very large volatility in the near future. With 25 million shares outstanding and a float of only 0.4 million, the company will offer adrenaline rides to the shareholders.Disclosure: We have no position in TMPS and have not been compensated for this article.Image courtesy of Ken Ratcliff via Flickr.

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