FTE Networks Inc (NYSEAMERICAN: FTNW) is having an overwhelmingly strong start to the trading session today. While the company hasn’t released any news, the gains are here for a good reason. At the end of the day, a trusted firm pointed out that in their opinion, now is the time to purchase shares in the stock. Today, we’ll talk about:
- The recommendation;
- what we’re seeing from FTNW as a result;
- and what we’ll be watching for ahead.
Tailwinds Research Group Says Now Is The Time To Buy FTNW
As mentioned above, FTE Networks is having an incredibly strong day in the market today after a trusted research firm pointed to the idea that now is the time to buy the stock. In a post, Tailwinds Research Group said that the fear revolving around the late 10-k combined with the recent declines in share price, have created the perfect buying opportunity.
In the report, Tailwinds pointed out that it is common to see investors holding off on making investments when 10-Ks are delayed. So, declines are to be expected. However, the firm announced that while the fears are understandable, they are misplaced. At CNA Finance, we second that opinion.
First and foremost, we’ve covered FTNW in great detail. In our coverage, we’ve been happy to see continued growth in the company’s contractual revenue backlog. Not to mention, the delay in the 10-k is actually happening for a very good reason. Ultimately, the delays relate to an acquisition of Benchmark. This transaction closed during the 2017 year, and it was a massive deal.
When it comes to the 10-K, the FTNW acquisition of Benchmark is a bit tricky. Before the acquisition closed, Benchmark was an S-Corp., which was acquired through an asset purchase. From there, FTE Networks claimed a 338 tax exemption on the asset purchase. Ultimately, while this was a great deal for the company, it created an accounting nightmare that is leading to the delays.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news was overwhelmingly positive. A published account of why share prices are well in prime buying range by a trusted research firm will generally lead to gains. Of course, our partners at Trade Ideas were the first to alert us to the movement in the stock. At the moment (10:59), FTNW is trading at $18.10 per share after a gain of $1.69 per share or 10.30% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on FTNW. In particular, we’re interested in following the continued growth in the company’s contractual revenue backlog as recent announcements of growth have been incredible. We’re also interested in following the company’s late 10-K release as the reason for the delay is understandable and we believe that the data will be strong. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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