Hey guys,
We have had a few discussions here about Avigilon and the key points from the quarter appear to be the disappointing earnings to due to FX issues, large SG&A, and the continued dilution (that was previously announced, not a surprise). From a revenue and margin growth standpoint, however, Avigilon delivered.
I would like get an idea of what others are doing with the pullback.
0 voters
I actually added to my position earlier this morning.
Neil
Long AVO
I just about doubled my position back on the 8/8, at a price of $19.78, compared to a previous average cost of around $21.60. I’m tempted to add more, but it’s already a largish position. I’ve already doubled down. Should I “triple down”? At what point do you stop adding on the way down, and just give it some time for the market to come to its senses?
I guess I’m just not quite confident in my own ability to assess companies and decide when it’s a real buying opportunity that I should jump on. In this case, with it not being covered by Motley Fool’s U.S. services, I’m a little hesitant to overweight by buying more. I’d be more comfortable being overweight if it was due to price appreciation.
But if it keeps dropping for no new (and good) reason, I might get up the courage to add to my position.
-Mark
I’m tempted to add more, but it’s already a largish position. I’ve already doubled down. Should I “triple down”? At what point do you stop adding on the way down, and just give it some time for the market to come to its senses?
I haven’t added to my position yet. My position size is 3.3% with a cost basis of $22.02 but the cost basis is almost irrelevant to any decision to add, sell or hold shares. I also haven’t taken time to read the transcript of the conf call.
Regarding when to add more, I have found that when a stock falls dramatically like AIOCF has, it is usually prudent to wait until the stock appears to have bottomed. One can usually tell when it’s bottomed after it stops falling a increases again. I’d rather not worry about hitting the bottom and give up a few percent after it’s started climbing again.
I think Saul has an interesting method of adding in very small but increasing amounts. Maybe he can explain how and why he does it this way.
Chris
I tried to add, and could not get execution on a day order, which made me reconsider. Others reported no problems with different brokers, but I am not willing to leave mine at this point. I haven’t sold my position because that seems kind of pointless as well, but when I can’t can execution on the buy order I doubt that I’m going to get a good execution on a sell order so I’m done with the stock.
Flygal -
Did you buy AIOCF or AVO.TO? The daily liquidity is vastly different between the two (9,000 vs 500,000 shares traded today 8/14, respectively). I opened a Schwab account last month specifically for the ability to execute under the AVO.TO ticker. I then spoke to two different Schwab traders telling me that the share I bought under either ticker was the same. I paid an extra $25 in commission to override their trading system and guarantee the AVO.TO purchase.
Not that it matters now but it sounds like you have some AIOCF. While it trades in near lockstep with AVO.TO it is less liquid and thus your frustration.
Eric
I think Saul has an interesting method of adding in very small but increasing amounts. Maybe he can explain how and why he does it this way.
Hi Chris,
I had done this with TSLA because I knew the story and had 100% confidence in Elon Musk, but had sold out because I just felt the stock price had been ridiculously high, and was getting back in at a lower price.
I wouldn’t add in ever increasing amounts with AIOCF because (a) I already have a “full position”, so when I added it would be small amounts, and (b) although I have confidence in AIOCF, it is more of an unknown than TSLA, which is followed by everyone. I wouldn’t want to risk putting more and more money into a potential “falling knife”. I think the current reaction is ridiculous and the price is too low, but I’ll wait for it to stabilize and start back up to add more. I always tend to get a little timid when one stock seems to keep falling for no reason that I’m aware of, especially if it’s a foreign company, even a Canadian one. I’m always afraid there’s something I don’t see (the recent quarterly report certainly doesn’t warrant this fall). I think the fall is irrational, but I’ll wait on adding more.
Best
Saul
For FAQ’s and Knowledgebase
please go to Post #2848
AIOCF is currently a 3% position for me. If they continue to execute each quarter I may add up to a 4 or 5% position. Added some shares yesterday at $17.87
Thanks for your thoughts on this everyone, it is very helpful in gauging the quality of the report from so many different perspectives.
I always tend to get a little timid when one stock seems to keep falling for no reason that I’m aware of, especially if it’s a foreign company, even a Canadian one. I’m always afraid there’s something I don’t see (the recent quarterly report certainly doesn’t warrant this fall). I think the fall is irrational, but I’ll wait on adding more.
One of the most bizarre ironies of the market to me is that companies priced for high growth almost always see a big selloff when they actually invest for the very growth that everyone is paying up for. It’s something I’ve never understood, but I’ve seen it over and over and over. It seems to me that we’re seeing the exact same thing right now with AVO (and we just went through it with PFIE). Maybe short-term traders just figure it’s dead money for the next couple of quarters and move on? But, in my experience, these selloffs due to business investment make for great long-term buying opportunities.
There’s always a chance the new investment doesn’t work out, of course. Maybe the new sales people they hire are terrible. But it seems to me it’s a lot less risky than trying to maintain rapid growth without investing in the business.
Neil
Long AVO
yes it was AIOCF. glad I did not get an execution since it is down again today to 16.99
Okay, I know I said that I would wait until AIOCF stabilized before buying more, but today I had to buy some at $16.69 and $16.84. That’s “sixteen” folks! I just thought this is totally ridiculous, and must be due to momentum traders, stops being hit, and people getting scared and getting out. This company’s revenues were up 66% after all(!) 66%! And gross margins were 55%. And it’s priced at what? 23 times trailing earnings. What the heck!?
Saul
There might be some macro factors today. It was just reported that Ukraine has destroyed some Russian armored vehicles on Ukraine soil.
I never thought I’ll see this stock in 16s. I couldn’t resist adding at $16.88 guys.