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:
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EPS growth in the December 2014 quarter will be low due to increased hiring.
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Revenue growth will likely continue.
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The Dec 2014 quarter reported in earning March may disappoint again.
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EPS growth should look really good going forward because revenue will continue to grow, hiring will have slowed, and operating leverage may increase.
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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