The Rejuvenation of Otelco Inc. (NASDAQ:OTEL)

The Rejuvenation of Otelco Inc. (NASDAQ:OTEL)


The Otelco Inc. (OTEL) shares are trading at higher $11.14.

To add more color to this target, the company’s high over the last year is $16.08 and the low is $2.92. Over the last 52 weeks, OTEL is down -30.72% while the S&P 500 is up 1.07%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, OTEL reported a profit of $7.9 million. Otelco Inc. also saw revenues increase to $15.42 million. In addition, OTEL has free cash flow of $2.32 million as of 03-2020 The company’s EBITDA came in at $5.46 million which compares well with its peers.

OTEL booked profit margins of 12.40%, its Return on Equity (ROE) is 43.40%, and its Return on Assets is 6.40%. All told, it is clear that, OTEL needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. OTEL has a short ratio of 0.48 and outstanding shares of 3.42M.

Company Outlook

OTEL has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 22990.0 and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 2.25. Otelco Inc. OTEL also noted assets of $121.84 million at the end of the last quarter. Investors should also keep an eye on sector updates as OTEL has historically followed its peers on positive news.

All told, Otelco Inc. OTEL has strung together solid data and demonstrated underlying fundamentals. At its current valuation, OTEL represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Otelco Inc. OTEL is now commanding a market cap of 36.98M and a float of 1.45M. OTEL is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of OTEL stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in OTEL, either long or short, and we have not been compensated for this article.