There's Nothing Neutral about Neutral Tandem

Apparently no one told Neutral Tandem (TNDM) that we’re in a recession. The company just posted earnings of 27 cents a share, four cents more than estimates.

Wall Street is very pleased and the stock has been up by as much as 14% in today’s trading. I have to admit that I wasn’t surprised by TNDM’s results. In fact, I wrote on April 17: “The next earnings report will come out in two weeks and I’m expecting another big gain.”

Neutral Tandem provides third-party interconnection services to competitive telecommunications carriers. In a nutshell, TNDM helps wire-line, wireless and broadband customers talk to each other-even if they all pay their bills to different companies. Neutral Tandem offers services in more than 60 U.S. metropolitan markets and is a critical part of our nation’s communications network.

First-quarter revenue rose to $38.2 million which was 5% higher than estimates. The company now expects 2009 revenue of $158 million to $165 million, up from its prior forecast of $151 million to $158 million.

We have a 50% gain in TNDM in Emerging Growth since I added to our Buy List in the March issue. Neutral Tandem remains a very strong buy.

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