Year End #17: AIOCF - Rapidly Growing Full Posit

Avigilon is my sixth largest position at present, at about 7%, and approximately the same size as my positions in WAB, CRTO, and XPO, which I have already discussed. Its price in US dollars has been severely hurt by the dollar’s rise against the Canadian dollar (the dollar has risen against just about everything else as well, by the way). This has reduced the value of its earnings, which are given in Canadian dollars. However, it seems to me that this will obviously be good for their actual business, as their products will be cheaper in US dollars, or if they anchor their prices in US dollars their profits will be much larger. Be aware that as a Canadian stock this is not as liquid as most others that I’m in. This is a long post, but if you are interested I’d suggest reading it all.

I first learned about Avigilon from the following post or article in the spring of 2014. I’m sorry but I don’t know where it’s from, but it was somewhere on MF (I think).

Avignon has been the #1 growth company in Canada the past 2 years: Avigilon, ticker symbol AVO on the Toronto Exchange, and AIOCF in the US. It has rapidly grown sales (102% CAGR), and a current $220 million Canadian run-rate, steadily expanding profit margins (unusual for a growing company, especially in the tech sector), competes in a highly fractured international market (where no participant had more than a 5.9% market share, and the top 15 had only a 43.5% share).

Avigilon provides the only end-to-end solution for buyers of High Definition digital surveillance cameras, storage solutions, network switches, video analysis/alerts, and access control. This gives them a strong competitive advantage relative to the alternatives. It is a “Moat in the making” and should also qualify it for “Rule-Breaker” status given the unifying, one-stop-shopping nature of its value proposition in the marketplace, and its steady displacement of outmoded analog competition.

Furthermore, and most importantly regarding future growth opportunities, the worldwide market for such systems (both digital and analog, not including installation costs), was $12.6 billion in 2012 and IHS forecasts it will grow to $23.2 billion in 2017, with the High Definition digital component making up the lions-share of the growth (24% CAGR), whereas demand for outmoded analog systems will remain basically flat. It would be reasonable to expect that in the coming decade or two almost the entire analog market sector will be eliminated in favor of digital, IP-enabled, systems.

The company went public in late 2011 and has done several re-financings and is thus very well capitalized for its current and future expansion plans, even after paying all-cash for several recent modestly-priced bolt-on acquisitions.

Its CEO, Mr. Alexander Fernandes, has over 20 years of experience in the technology sector, and in fact founded QImaging and then sold it in 2002. As such, Avigilon gains immeasurably from his prior experience running a large technology company that engaged in a somewhat similar product set as Avigilon.

Their current production facility in British Columbia is highly automated and cost-competitive against Asian or other geographic regions, enables the protection of Avigilon’s intellectual property, and is large enough to handle annual sales of $500 million by Q4 2016 (without any further Capex) which is roughly double the current production run-rate of $220 million. Future production facilities will be set up in various regions around the world, with the Richmond facility acting as the Master template.

The company engages 2000+, and growing, system integrator resellers worldwide to handle the sales process, with Avigilon staff assisting as required to explain the compelling value proposition to end users. To date the company has installed its systems in 24,000 customer sites in 113 countries around the world.

Note that the stock dropped quite precipitously recently, which provides an excellent buying opportunity for value-oriented investors.

The drop was caused partly by the general sell-off in the tech sector over the past few months, followed by the CFO leaving his post due to “a personal health issue” a day before the Q1 results were released on May 7 (a reason which is believable, given that he was working in such a fast-paced company, but it caused major consternation in the market because investors feared there was more to the story than just that). The interim CFO, Mr. Wan Jung, previously held that role at Avigilon before retiring, and thus can easily step back in until the search for a replacement is completed.

Here’s what their revenues look like at present, in millions of Canadian dollars:

2012: 18 24 25 33 = 100
2013: 32 39 51 56 = 178
2014: 56 65 71

As you can see the last four quarters revenue of $248 million is up 60% from the four previous quarters, which totaled $155 million.

Adjusted EPS over the same quarters have been:

2012: 02 04 08 08 = 22
2013: 08 10 22 19 = 59
2014: 19 12 24

Current trailing earnings are 74 cents, and my guess for all of 2014 will have been maybe 77 cents (plus or minus). That’s up about 30% from 59 cents in 2013, so growth in earnings isn’t keeping up with growth in revenue. They discuss this a lot, and it’s because they are trying to take advantage of their lead and grab as much market share as they can.

Trailing 12 month earnings quarter by quarter in dollars look like this:

Dec 2012 = 22 cents
Mar 2013 = 29 cents
Jun 2013 = 34 cents
Sep 2013 = 48 cents
Dec 2013 = 59 cents
Mar 2014 = 70 cents
Jun 2014 = 72 cents
Sep 2014 = 74 cents

You can see that the last two quarters are where earnings growth slowed down (always beating the year before, but by less of a margin).

Then in June it got a MF recommendation:

Background - Avigilon designs, manufactures, and markets integrated and easy to use high-definition (HD) Internet Protocol (IP) based video surveillance systems. Contrary to what many may believe, the global surveillance market has been exceptionally slow moving in terms of keeping up with the latest advancements in technology, and this has created an opportunity for Avigilon.

Back in the early 2000s, Alexander Fernandes, the company’s founder and CEO, recognized that surveillance cameras provided images and video of such low quality (i.e., unclear and grainy) that they did not effectively serve their intended purpose. In 2004, he co-founded Avigilon, and has had a marvelous run since. The company is now the market leader in providing high-definition security cameras that have dramatically improved the quality and usefulness of surveillance systems around the world.

The Opportunity - The surveillance market is highly fragmented. It is also growing rapidly. The market is at an inflection point. HD/IP digital surveillance systems are overtaking legacy analog systems, and Avigilon is leading the charge. It’s estimated that the surveillance market is set to almost double from $12 billion or so in 2012 to more than $23 billion by 2017.

Strategy - To exploit this opportunity, Avigilon continues to evolve from its roots as a pure-play security camera company. Unlike most industry participants, who are either hardware-focused or software-focused, Avigilon is a solutions provider, with an integrated suite of products, including cameras, encoders, recorders, and software modules.

On top of this, Avigilon’s products are also compatible with most already installed surveillance systems, which means customers don’t have to replace their legacy systems all at once. That’s good for controlling costs and offers a nice marketing/sales twist.

Avigilon is rapidly expanding globally. A big part of this international expansion has been the network of more than 2,000 equipment integrators and dealers in the more than 105 countries in which it operates. This is a big advantage. New entrants simply can’t replicate an international sales network like this overnight.

Avigilon is also adding to its product lineup. In 2013, the company completed several acquisitions: RedCloud provides Web-based physical and virtual access control systems, which will serve as a complementary product line to Avigilon’s surveillance solution. Video IQ is a leading global video analytics company and will provide a strong portfolio of intellectual property (40 pending or granted patents).

Management - As mentioned, Alexander Fernandes, President and CEO, co-founded Avigilon in 2004. He has 20 years of experience in high-end digital imaging, and a great track record of building businesses. He successfully founded and grew QImaging, which designs and manufactures cameras for a variety of life science and industrial research applications. QImaging was sold in 2002 in a
multimillion-dollar deal. Fernandes owns approximately
10% of Avigilon.

The next largest shareholder is the company’s interim CFO, Wan Jung. Jung is also a board member and used to be the full-time CFO but retired from this position a few years ago. When his replacement in the role was forced to resign due to health concerns, Jung stepped back in until a permanent CFO is found. Jung owns about 6.6% of the company.

Valuation and Outlook- Avigilon’s stock closed at $26.13 on May 6. Three days later, it closed at $19.26—a 26.3% decline.
The stock is now at $14.21 US. Even allowing for the strong US dollar and the conversion of its 2014 earnings of 77 cents Canadian into 64.3 cents US, its PE ratio is only about 22. And that’s trailing 2014 earnings, not forward 2015 earnings.

We view the recent pullback as an opportunity to get into a high-growth, high-margin business at a relatively attractive valuation.

The catalyst for the stock’s plunge in early May was the former CFO’s resignation. This departure marked the third C-suite executive departure and hung a big question mark over Avigilon. But here’s what has alleviated our fear that there’s something disturbing going on inside Avigilon: the fact that the CEO and interim CFO, along with several other insiders, have been buying stock since the decline occurred.

In addition, first-quarter results indicate that business is still going gangbusters. Revenue grew 76.4% year over year. Net income grew 185.7% thanks to margin improvements attributed to economies of scale, evidence that operating leverage is strong within this business. That is always a welcome sight!

Management reiterated its goal to have a revenue run rate of $500 million by 2016 (from $202 million over the last 12 months and up from just $16.9 million five years ago), and this goal only accounts for organic growth. Any acquisitions will add to this number. With a debt free balance sheet, the company is more than financially capable of taking advantage of any attractive acquisition opportunities that may arise.

Risks - One of the primary risks that the company faces is that the competitive market heats up. For now, Avigilon is unmatched in its security solution offering. One of its primary competitors, Hikvision, has in fact teamed up with Avigilon and has built its cameras with the ability to integrate with Avigilon’s Control Centre Software. In my view, this is a testament to the unmatched value that Avigilon is creating for customers.

Another risk is that the company will not be able to manage its growth successfully. Though its valuation is cheaper than it was just a few months ago, the company still has some lofty expectations set out for
it. As is common with high-growth stocks, a miscue along
the way is sure to set the shares back.

Bottom Line - Avigilon has a first-mover advantage and is seeing growing demand for its solutions. Furthermore, the company is entering complementary product lines in order to provide a well-rounded solution with the goal of deepening its competitive moat. The market for the company’s product is massive and if management is able to continue to innovate and expand, as it has done in recent years, the stock’s recent pullback represents a very attractive opportunity for investors to hop on board for the long term.

I got additional information from the following Seeking Alpha Article:

Avigilon - An Organic Growth Story Beginning To Take Off

Summary
• Stock down 45% due to CFO departure, which was due to underperformance rather than accounting issues.
• Best in breed, all digital hardware and software platform, growing 75% organically.
• Expanding margins even while investing in the company.

Recently, Avigilon’s stock fell by 45% from its high after it was disclosed that the CFO had left. There was concern that there might be deeper problems at the company after it became known that there have been a number of executives that have been asked to leave in the last year. After significant due diligence, I came away believing that this situation is more of a management leadership style than it is an accounting concern. I believe that AIOCF is a hard charging performance driven culture no different than that at GE during Jack Welch’s tenure. The strong get promoted and the weak get asked to leave.

While this management style may not be appealing to some, it is hard to argue with the tremendous results that AIOCF has delivered since going public a couple of years ago. The company grew 75% Y/Y last quarter and re-sellers say that the company’s technology has only gotten stronger with its analytical capabilities and zoom functionality with its cameras. The company has publicly stated that they expect to reach $500 million revenue by 2016. I think this is conservative based on our checks.

One of the under recognized aspects to AIOCF’s business is the leverage they have in sales and marketing. For example, much of their business comes from taking market share from older legacy providers in the market. As they increase market share and convert customers to their platform, their sales and marketing spend will decline over time, as these customers renew and expand their products over time. I think AIOCF can achieve 30% operating margins at scale. I also believe there is a large market at stake and AIOCF should be a $1B revenue company within 4 years. I believe that the company can do $2 in EPS and given the growth rate at this point (30%+), be worth $50-60 by 2016.

Company Background AIOCF is a provider of digital solutions for the surveillance market. The company manufactures and develops network-based end-to-end hardware and software solutions across the entire market.
Approximately 75% of AIOCF’s revenues are derived from hardware sales. AIOCF’s hardware products consist of HD cameras, video recorders, encoders, and accessories. They provide the broadest range of cameras, from entry-level 1MP to an industry leading 29MP. The network recorders support these cameras with up to 21TB of storage, and their encoders are able to convert feeds from legacy analog cameras into digital.

AIOCF has a software solution called High-Definition Stream Management (“HDSM”) that allows it to maintain high image quality while not bottlenecking bandwidth. The software/hardware combination also allows for remote zoom and control, support for mobile Android/Apple devices, and integration with other hardware brands and legacy equipment. I find the last point very important, given that most of the customer wins result from AIOCF replacing a legacy solution rather than a greenfield opportunity.

Market Size The digital surveillance market is expected to grow at a 25% CAGR between 2013 and 2018, and the overall surveillance market is expected to be in the $25-$35 billion range in the next 5 years. This growth has been spurred by the conversion cycle from analog to digital cameras, which provide superior image quality, backwards compatibility, remote controls, better scalability, and increased analytic capability. The market seems to still be relatively fragmented, with the top 15 players accounting for less than 50% market share.

Thesis
1. Technological lead in developing a platform solution Avigilon was the first to market with a fully digital, end-to-end security solution. The surveillance industry, which primarily still uses analog solutions, is still in the early innings of a conversion cycle to digital and higher quality surveillance solutions. AIOCF’s cameras are not only able to pick up better images, but are also benefit from complementary software products, easier integration, universal compatibility, and greater functionality.

Although a majority of AIOCF’s revenues are derived from hardware the company’s true competitive advantage is its software platform. The company has developed the proprietary HDSM technology which allows very high image quality feeds while mitigating bandwidth stress. This technology, combined with its ACC (my channel checks suggest that it’s one of the most user friendly systems to use) gives the user an advanced suite of camera control and analytics. Users are not only able to monitor real-time surveillance video, but also link videos with transaction data, share feeds through multiple users, and index and export data.

More importantly, the software suite is compatible with third-party and other vendor equipment, both analog and digital. A quick forum search shows that many customers are now using AIOCF’s ACC software in cooperation with their existing hardware. AIOCF is able to develop this lead because it understood the future market evolution years before its competitors and was willing to invest significantly in R&D. As the company continues to grow, they’re stressed that they will be able to continue to invest in the company while also remaining profitable.

2. Breadth of hardware opening up new opportunities Although AIOCF does not like to consider itself to be camera manufacturing company (they prefer “security solution provider”), the company still ranks near the top in this category as compared to its peers. AIOCF offers an unprecedented breadth of cameras, ranging from 1 to 29 megapixels. Their competitors, who tout their next generation HD cameras, only go up to 5 megapixels. Furthermore, they are also still focused on selling legacy analog solutions as well.

While I don’t expect AIOCF to be selling truckloads of their top of the line cameras compared to the cheaper and smaller cameras, larger cameras do position AIOCF to capture more of the large enterprise market. Historically, the company has focused on solutions for the small to medium businesses, which comprises 80% of the total market. These customers are typically schools, companies, hospitals, and larger residential buildings that purchase up to 50 cameras and generate 5 figure revenues.

As AIOCF moves into higher capacity cameras, the company provides a great value proposition for the large players in the space - mega casinos, airports, and universities. If one of these customers wants to convert to digital, it could save costs if they replace 50+ analog cameras with just one HD camera. Furthermore, these deals could be as large as 7 figures. Although enterprise customers only comprise approximately 20% of the market, they comprise less than 10% of AIOCF’s revenues. As AIOCF continues to develop their products and extend their lead, I believe that this will be a significant source of growth.

3. Differentiated business model through channel partners Selling through channel partners has been wildly successful for the company. Given AIOCF’s relatively small revenue base ($178m in 2013) and global reach, they sell 100% of their products through resellers, installers, and integrators. Products are shipped directly from AIOCF to the partners, cutting out costs of a distribution network. This takes the strain off developing and ramping a quota carrying sales force, which takes time and incremental costs. Also, products are sold on a license basis, which seems to be the preferred purchase method in this industry, as opposed to a subscription model.

4. New technologies that aren’t being valued Tuck in acquisitions that not only boost the technology portfolio, but can drive growth as well. Management believes that they can reach the $500m run rate through organic growth alone. However, the company has been strategically acquiring technologies that strengthen the product portfolio, which they don’t factor into projections. For example, the recent acquisition of VideoIQ gives AIOCF a real-time intelligent analytics platform. Combining this with their internally developed pattern modeling is moving the company towards products that proactively assess threats before it occurs. It definitely could become more powerful than the current system of humans staring at tens, if not hundreds, of video feeds for hours on end.

5. CFO departure risk is overblown and has created a significant buying opportunity The stock took over a 30% hit when the CFO left for “health issues.” The market viewed this as a huge risk to the business, but after digging around, it seems like most analysts believe that this was completely overblown. The CFO was more likely fired and given a respectable exit. The CEO was the founder of AIOCF and was successful prior to AIOCF in founding and eventually selling another company. Also, the prior CFO, who worked from 2004 to 2012, has stepped back into his original role. I think that this has created a unique situation to buy the stock at an artificially depressed price.

6. Strong financial performance and balance sheet Avigilon has been growing at over a 100% CAGR over the last 5 years, and is expected to grow at 40% for the next four years. The company’s publicly stated goal is a $500m revenue run rate by the end of 2016. This will primarily be driven by continued investment in sales, marketing, and R&D. Although I typically try to stay away from companies who have to “buy” revenues, AIOCF seems to not fall into this category. The company has shown that they have actually been able to expand operating margins even as they increase expenses as a percentage of revenues, and really invest because of the large opportunity ahead. This is primarily driven through gross margin expansion as they scale, which should continue as they grow (their current facility, based in British Columbia, can support $500m of revenues). As the operating leverage kicks in, I would expect the company to continue to grow the bottom line faster than the top line. The company also has a healthy balance sheet, with $160m in net cash.
Valuation I believe that with continued investment in the business and accretion from current and future tuck in acquisitions, AIOCF can achieve $500m in revenues in 2016, slightly faster than management’s expectations. At 25% EBITDA margins, the company will be generating $125m in EBITDA. At a 20x 2016 EV/EBITDA multiple (which is arguably low given the 30%+ growth and continuing operating leverage going into 2016) and ignoring any future cash generation, the stock will be worth $50-60, or about quadruple today’s price.

Now here are the results of the last quarter:

Financial Highlights: Record Revenue, Gross Margin, Net income, and Adjusted Earnings

Revenue was $71.0 million, up 39% from $51.2 million.

Gross margin percent was 57%, up from 53%.

Net income was $11.6 million, up 35% from $8.6 million.

Adjusted Net was $11.2 million, up 20% from $9.3 million.

Adjusted Earnings were 24 cents, up from 22 cents

“We delivered another record sales quarter, underpinned by particularly strong growth in the U.S. and EMEA, as well as robust sales of new products. In the quarter we had several important new product introductions, including the low cost HD Video Appliance series, Avigilon Control Center 5.4, and the HD dome and bullet cameras with adaptive video analytics. We continue to make substantial investments in the business, with an eye on continued profitability, as we grow toward our goal of $500 million in run-rate revenue by the end of 2016.”

Sales and marketing expenses were $14.7 million, an increase of 48% from $9.9 million. The increase reflects planned growth spending to expand our global sales and marketing team. Sales and marketing expenses represented 21% of revenue, up from 19%.

R&D expenses, were $3.0 million, up from $2.3 million. Gross R&D spend was $6.5 million, up $3.3 million from $3.2 million. The growth in spending is consistent with our ongoing plan to further enhance and expand our product offerings.

General and administrative expenses were $9.0 million, up from $3.8 million!!! The increase is primarily due to additional personnel and their related expenses, including new headcount in customer support, human resources, finance and legal.

G&A expenses also include $1.1 million in acquisition-related and non-recurring legal costs. The Company expects its G&A expenses to increase in the near term as it continues to expand infrastructure to support planned growth, but believes these expenses will increase at a slower rate than revenue in the long term.

Amortization and depreciation was $1.8 million, up from $0.3 million. The increase is almost entirely due to amortization of technology acquired in acquisitions.

We plan to continue to invest significantly to broaden our sales reach, expand our product offerings, accelerate innovation, and strengthen brand awareness. In the short term these initiatives are expected to put continued pressure on our earnings.

As at September 30, 2014, Avigilon had working capital of $219.0 million, including cash and cash equivalents of $167.0 million. The weighted average number of common shares was 46.5 million basic and 47.3 million diluted.

This was the 27th straight quarter of year-over-year gains.

Dec 2014 – Big Acquisition - Avigilon acquires ObjectVideo’s entire patent portfolio and licensing program

Avigilon announced that it has acquired the entire patent portfolio and patent licensing program of ObjectVideo, for cash of $80.3 million giving them strategic intellectual property and allowing them to continue to build video analytics patent portfolio

Founded in 1998, ObjectVideo is an innovator in the intelligent video solutions market. ObjectVideo’s video analytics patents, now acquired by Avigilon, are licensed and deployed by leading IP video manufacturers around the world. Under the Acquisition, Avigilon has acquired all of ObjectVideo’s 76 US and international patents and over 50 US and international patent applications.

With the completion of the Acquisition, Avigilon now holds 124 US and international patents, and 202 US and international patent applications.

“The future of the video surveillance industry is in video analytics,” said Alexander Fernandes , founder, president, CEO and chairman of the board, Avigilon. “The Acquisition not only bolsters Avigilon’s portfolio of intellectual property, but it also brings with it a recurring royalty revenue stream.”

The patent licensing program provides companies with the opportunity to leverage the innovative features of industry-leading video analytics patents. Nineteen royalty-paying licensees have joined the program, including global corporations such as Sony, Panasonic, Bosch Security Systems, Inc., Hangzhou Hikvision, Pelco, FLIR, and Sensormatic Electronics (Tyco), and more.

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a key line of that post is

“The future of the video surveillance industry is in video analytics”

Something that has not worked out too well in the past.I don’t know whether it’s from faults with cameras, lack of high powered but cheap computer hardware , or lack of good programming effort. The first two of these get better every day, mostly from efforts of other companies , R&D that Avigilon doesn’t have to pay for. The development of a mass market for camera hardware and software from companies like Apple has done wonders for costs and size of cameras.

To use one example, watch videos of shoplifters. They always stop and look carefully around them in a 360 degree circle before lifting the item. The want to see if anybody is watching .But the right kind of cameras can be placed to cover the entire store and are always watching… Since the 360 degree search is not normal shopping behavior, the right camera/software system can detect this and alert store security.

Eventually this surveillance will permeate our society and be misused by government. But prior to that point there is lots of room for growth. But I like an “edge”, a “moat” in my investments. Usually not patents which often point out the way to competitors. True a patent can be tight , but these are rare events.

The fact that Avigilon is granting royalties may indicate competitors find it cheaper to pay royalties than get around the patents. ISRG, Polaroid, Xerox etc didn’t need to do this.

I wonder whether the ObjectVideo acquisition was for present patents or to secure the smartest guys working for the company. Because it seems to me that new better software is the key to this potentially enormous market.

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I have a 4% position in AOICF but have held off adding more. I company has stated that they are ramping up hiring and expenses through the end of 2014. They were essentially doubling the size of the company. This is the reason why EPS growth has not kept up with revenue growth. The CEO has stated that the company would stop the rapid hiring after the end of 2014. The second thing that the company has stated is their goal of achieving $500M in revue run rate by the end of 2016.

So earnings growth in the 2014 calendar quarters has been and will be (the last Q of calendar 2014 will be reported at the beginning of March) stalled while revenue growth has and will continue at a rapid clip. Incremental expense growth should slow during calendar 2015 (assuming CEO sticks to what he stated on the last conference call).

So I maintain what I wrote after the last earnings report:

  1. EPS growth in the December 2014 quarter will be low due to increased hiring.

  2. Revenue growth will likely continue.

  3. The Dec 2014 quarter reported in earning March may disappoint again.

  4. EPS growth should look really good going forward because revenue will continue to grow, hiring will have slowed, and operating leverage may increase.

  5. I think adding shares after the reporting of the Dec 2014 quarter but before the reporting of the March 2015 quarter may be the optimal time to buy shares. I would like to increase to a 6% position because I have high expectations for AIOCF over the next several years. I may add some before March but will probably buy most new shares after the next earnings call.

Chris

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Hi all,

I’m new to this discussion board. I’ve been a member of MF for over 10 years and I’m always on the lookout for new ideas. Amazingly, I haven’t come across this discussion board before, but better late than never.

Anyhow, I’ve been reading all the posts in this discussion board over the past few days. Thnx too everyone who posts here and to everyone who helps keep this board organized. It was quite easy to get a solid understanding of this board without too much unnecessary effort.

As for AVO, of all the stocks I can across the past few days, this one seemed to intrigue me the most.

In a very quick way, here is what I see:

PRO = Huge market potential with the new type of terrorism that is taking over the world

CON = Why is it so cheap after a great bull market? (Yes, I know the CFO left and there have been other high officers leaving…but still, in this market it is so hard to find bargain growth stocks)

I plan on buying a small position of aiocf today (Wells Fargo doesn’t let me buy on the TSX) and give it some more thought before getting aggressive.

Dave

getting long aiocf

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Why is AVO (AIOCF) so cheap after a great bull market? (Yes, I know the CFO left and there have been other high officers leaving…but still, in this market it is so hard to find bargain growth stocks)

Hi Dave, Welcome to the board. I think you have to take into account that it’s a Canadian company in spite of having a lot of it’s revenue from the US. Thus its price in US dollars has been severely hurt by the dollar’s rise against the Canadian dollar, which has reduced the value of its earnings, which are given in Canadian dollars. However, it seems to me that this will obviously be good for their actual business, as their products will be cheaper in US dollars, or if they anchor their prices in US dollars their profits will be much larger. Be aware that as a Canadian stock this is not as liquid as most others that I’m in.

A second factor is that they say they are investing a lot of money to take advantage of their first mover status as far as providing an end-to-end solution. This has reduced its rate of earning growth for the most recent two quarters (although sales and revenues are growing like mad, as planned).

Best,

Saul

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Thnx Saul,

You wrote above…“Be aware that as a Canadian stock this is not as liquid as most others that I’m in”

I can certainly attest to that. Wells Fargo won’t let me put a stock order in for “AIOCF” without the assistance of an advisor. The volume is so small that it is difficult to even get shares. I really want to buy “AVO” because that trades around 200,000-300,000 shares a day on the TSX. But, Wells Fargo doe NOT allow their clients to buy stocks on the TSX.

Anyhow, one way or another I will own shares by the end of the day.

As a side note, I just read this article pertaining to Aviligon:

http://finance.yahoo.com/news/university-phoenix-stadium-enh…

I find that reading an article like this gets me excited for the future of Aviligon.

Dave

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As a side note, I just read this article pertaining to Aviligon:

http://finance.yahoo.com/news/university-phoenix-stadium-enh…

I find that reading an article like this gets me excited for the future of Aviligon.

Thanks Dave. Nice article.
Saul

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Not sure if that article worked. Let’s try this:

http://www.securitysales.com/article/avigilon_to_provide_200…

I bought a small position at Wells Fargo yesterday. I’m thinking of opening a Schwab account today. I think I read in an earlier post that Schwab allows clients to buy/sell on the TSX. If I plan on opening a larger position I definitely want to do it on the TSX.

Dave

Long AIOCF and thinking about buying AVO

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"Canon to buy network video surveillance leader Axis for $2.8 billion, at a premium of nearly 50 percent to their closing price on Monday.

The deal will make Canon a top player in the video surveillance market, which was worth an estimated $15 billion at the end of last year, according to researcher IHS. Within that market, there is a $3.86 billion segment for network-connected security cameras which is led by Axis with a 17.5 percent share as of 2013."

http://www.reuters.com/article/2015/02/10/us-axis-canon-idUS…

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Canon to buy network video surveillance leader Axis for $2.8 billion, at a premium of nearly 50 percent to their closing price on Monday.

I wouldn’t be surprised if this was the cause for the rapid rise in AIOCF stock. Maybe another big company will want to buy them.

Saul

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Has anyone else noticed that this stock has been up massively (close to 40%0 in the last three weeks with no news. Am I the only one still interested? I had wondered whether it was because another security camera stock was acquired by Sony (I think) at 50% over market price, but I don’t know.

Saul

For FAQ’s and Knowledgebase
please go to Post #5584

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It’s a 4% position for me, I’ve also noticed and am very interested. Looks like they report on Mar 3.

I’ve nearly recouped my losses in AVIGILON with the recent 40% run up. Canon bought Axis Communications fueling takeover speculation for AVO.T. That is my best guess for the run up.

Jim

Canon-Axis Deal Shines Spotlight on Avigilon – Market TalkFont size: A | A | A
11:20 AM ET 2/11/15 | Dow Jones
11:20 EST - CIBC says Canon’s (7751.TO) $2.8B deal for Axis Communications could fuel takeover speculation for Canada’s Avigilon (AVO.T), a rival IP video-surveillance technology company. The investment bank notes AVO.T trades at a discount to the valuation 7751.TO is paying for Axis despite AVO.T having higher revenue growth. CIBC adds the Japanese firm is attracted to Axis’s imagery technology, IP and partners and integrators, “all strengths” for AVO.T. Up 2.7% yesterday, the stock is up another 0.7% today. (ben.dummett@wsj.com; @bendummett)

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Saul,

Yes I noticed. Thanks for bringing it to my attention

Best,

Andy

I noticed, but the numbers next to my position are still red so I guess I have tempered enthusiasm lol

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