Torotel Inc (OTC:TTLO)

TTLO specializes in the custom design and manufacture of a wide variety of precision magnetic components.  The company then sells these products to original equipment manufacturers in the defense, aerospace, medical, and energy markets.  Reasons that we are tracking the company:

• Although 2013 quarterly sales and EPS (fiscal year ends April) were within its recent historical range of $2 million to $3 million, commentary from the company’s 2013 10-K indicates that the company will be in a position to grow its sales and earnings at a healthy clip in its fiscal 2014 year.

• The company’s backlog up 29%.

• The company is anticipating new orders in 2013.

• Defense stocks may begin to perform well due to the conflict in Syria.

• Recently, the company began realizing the benefits from its new product introductions.

• The company has been fairly accurate with respect to its  past business outlook guidance.

• Using the TTLO’s historical backlog to sales relationships as a guide, we believe that 2014 revenues will range between $12 million and $15 million, compared to $12 million in 2013.

• If the company can demonstrate that it can come in at the high end of our revenue estimate, we believe shares could trade north of $2.00.

Some caveats include:

• The company has a history of  reporting quarterly volatility in sales and earnings.

• Management does not issue press releases.