Tel-Instrument Electronics Corp. (TIKK-OTC)

Tel-Instrument Electronics Corp. (TIKK-OTC) designs and manufactures avionics test and measurement solutions for the global commercial air transport, general aviation, and government/military aerospace and defense markets. The company has been entangled in a legal environment that leaves several questions for the medium term. While the legal environment remains unclear, the company has become more profitable, won bigger contracts, and has continued to build its back log. What once threatened to sink the company now looks manageable, as the firm announced in its most recent quarterly earnings that it has enough to cover the legal costs of the lawsuit. The suit could end one of three ways; settlement, paying the damages, or winning the appeal. Regardless of how it ends TIKK is undervalued. After building a two-stage model and subtracting the value of legal liability, we see the valuation of the firm at $6.91

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