Market Overview

Tucows Jumps After Reporting Earnings

Shares of Tucows (NYSE: TCX) rallied over 24 percent on Wednesday after the company reported strong results in the fourth quarter.

While tech investors have a variety of popular internet-based companies to pick from when investing (Google (NASDAQ: GOOG), LinkedIn (NYSE: LNKD), Facebook (NASDAQ: FB) and Groupon (NASDAQ: GRPN), just to name a few) those invested in Tucows enjoyed a strong appreciation of their holdings on Wednesday.

Tucows was founded in the U.S., but is based in Canada. It reported fourth quarter earnings of $0.04 on revenue of $29.25 million.

Tucows runs a website -- tucows.com -- where users can download a variety of free software. The company also has domain registry services and email box hosting.

Perhaps most interesting about Tucows' business model is its focus on selling high-quality domain names. Tucows' sits on about 1000 domains the company calls “gems.” These include domains like divorced.com, lemons.com and tool.com. Tucows says it sells only a few of these per quarter, and that it has decades worth of supply.

On the conference call, Tucows' management suggested that it preferred buybacks to dividends, noting that buying back the stock is “really attractive.”

Tucows outlined a Dutch Tender option, wherein the company said it intended to buyback 14.7 percent of all shares outstanding.

Tucows has a low short interest -- less than one percent, and a PE ratio of 8. However, Tucows has a market cap of only $63 million and trades on low volume.

Shares of Tucows traded at $1.39, up nearly 24 percent on the session.

Posted-In: Earnings News Small Cap Analysis Intraday Update Movers Tech Trading Ideas

 

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