E Takung Art Company: Small Stock With Rapid Growth

TM Editors' Note: This article discusses a nanocap company. Such stocks are easily manipulated; do your own careful due dligence.

I find the Takung Art Company (TKAT) interesting in terms of its business model, valuation, and growth potential. When you put all of these characteristics together, you get a stock that has the potential for outsized gains. 

I began coverage on the company back in April when the stock was trading at about $4.50 in an article that can be read at this link.The stock is now trading about 50% higher after reporting two quarters of triple-digit revenue growth. If the company is growing this quickly and the stock is responding with a 50% jump in just four months, this looks like a stock that can reasonably double within a year. 

Takung achieved a strong 400% increase in revenue and an even more impressive 1347% increase in net income in Q2.The company’s Q1 results were also strong with a 197% revenue increase and a 122% increase in net income.This strong growth is driven largely by increases in listing fee revenue from an increase in listed art pieces. Takung is also achieving increases in trading commissions, agent subscription revenue, and management fee revenue.  

Takung’s strong performance demonstrates that the online art trading business model is catching on with artists, dealers, and investors.The beauty of Takung’s business is that the company allows investors to purchase units of artwork, precious gems and jewelry, rather than requiring owning entire pieces.This is like buying art the way investors buy stocks.It allows investors to diversify their portfolios by owning units of art the way investors own shares of companies.You can think of the company as an investment brokerage firm as Takung collects fees and commissions from art traders instead of stock traders.

Image Source: Takungart.com

Takung plans to continue its growth in China.The company is also looking to expand in the following countries: Australia, Mongolia, New Zealand, and Russia.Takung expects to see revenue in the near future from the four new countries as marketing/sales and training resources have been sent there.This increases the chance that Takung will continue its high growth, thus leading to strong stock gains.

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The article is for informational purposes only (not a solicitation to buy or sell stocks). I am not a registered investment advisor. Investors should do their own research or consult a financial ...

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Susan Miller 3 years ago Member's comment

I miss reading your work here. Hope to see more by you soon.