Avigilon ~$18 Million Stock Buy Back Again

Author: John Honovich, Published on Nov 12, 2015

Earlier this year, with the stock trading in the ~$18 range, Avigilon bought $39 Million of their own stock. Now, the stock is down under $12.

But Avigilon's confidence in itself has not waned, with their recent purchase of another $18 million in stock.

In this note, we examine the move and its competitive impact.

******* **** ****, **** *** ***** ******* ** *** ~$** range,******** ****** $** ******* ** ***** *** *****. ***, *** ***** ** **** ***** $**.

*** ********'* ********** ** ****** *** *** *****, **** ***** recent ******** ** ******* $** ******* ** *****.

** **** ****, ** ******* *** **** *** *** *********** impact.

[***************]

Buyback *******

**** ********* **** ** ******* ****, ******** ****** **** ~*.* million ****** ** ** ******* ***** ** ~$**.**. **** ** in ******** ** *** / ****, ***** **** ****** *.* ******* ****** ** ** ******* ***** ** $**.**.

Price ******** ******** ** ********

**** *****, *** ***** ********* ****** *** ****** ** *** buyback. ** *** / ****, *** ***** **** **** $**.** to $**.**. ** ********* / *******, *** ***** **** **** $11.46 ** $**.**. *******, *** ***** ** *** **** **** to $**.** ** *** **** ** **** ***********.

$100 ******* ********* ******* $** ******* ******

** ***** ****, ******** **** ~*.* ******* ****** ** $** a *****. ** *** ****, **** **** ********* **** ***** use *** ******** "**** *** ******** *** ******* ********* ******** *** *** ********* strategic ************." *** **** **** ****** **** ** ***** ** ******* ****** ** shares ** ~$**.

***********, **** **** * *** ** *****. *** ~$** ******* profit ** *** ******* ** ~** ***** *** ****** *** **** so ***.

** *** ***** ****, **** ***** **** *** ******** / distrust **** **** ********* **** *** **** (*.*., ******** '************ **********' / '*************' *********** *** ***** ** ******* ******** **********) ** ********.

*******

******** ** ***** **** **** ***** ***** ** ~$**, *** stock ** ~$** *** **** *****. *******, ***** *** ***** decline ** ********'* ******* ****** **** *** *** ********** *************** / ********** ** *** ***** ************ ********, ***** ** * real *********** **** *** ***** **** *** ** **** ****** or *******.

******* ** **** ** ** ***, *** ********* *** ******* of ****** ***** **** ********'* *** ** ***** ********* ** the ********* ** ******** *** *** ****** ** *** ***** price. ** *** ********* ***** ** *** / **** ****** at ~$**, ***** ****** *** ********* *******, *** ** ******* to ** **** ** **** *** **** ** ****** ***.

Comments (5)

Undoubtedly, they made a lot of money. The ~$44 million profit on the buyback is ~2x their net income for 2015 so far.

How can you make money buying stock when the price goes down after you buy it?

Two separate issues. I sell you a painting for $100m, you sell the exact same painting back to me for $50m. I made $50m, yes? The valuation of the painting now declines to $30m. Then I have an unrealized lost for $20m and still $50m cash from the original transaction, yes?

I sell you a painting for $100m...

Hold on, what did you pay for the painting? $0, $10m, $200m.

Let's say for arguments sake, $10m.

Subtract $10m from $100m. You have made $90m. Retained earnings: $90m

You sell the exact same painting back to me for $50m.

Ok, what is this painting worth at the time I am selling it back to you? $50m.

$50m painting for $50m of cash. No profit or loss. Retained earnings: $90m

The valuation of the painting is now $30m.

You have a paper loss of $20m. Retained earnings: $70m

You are $20m poorer now than when you decided to buy back the painting, right?

The assumption for Avigilon is obviously that the stock is temporarily undervalued, correct?

Avigilon is not thinking, "Damn, we know the stock is never going up and may soon go to zero but let's buy it anyway."

That's why I m saying they are making money at it (or at least hope to, because from their perspective, it is temporarily undervalued).

Avigilon might be right and might make money but the investors who bought in at $29 are clearly the big losers, made more painful by the fact that Avigilon used their investment not to expand but to buy back at a lower price.

This is why only invest in things I understand, like Skittles.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Most Recent Industry Reports

From The Basement To Buried Behind Chinatown: ISC West Emerging Technology Zone on Feb 22, 2019
What does ISC West think about 'Emerging Technology'? Well, last year, they put those companies in the basement. This year, they moved them up to...
Private School IT Manager Surveillance Interview on Feb 22, 2019
This IT manager describes himself as the "oft-maligned IT person" whose "opinions may not always be appreciated by the integrator crowd." But he is...
Outdoor Camera Mounting Hardware Guide on Feb 21, 2019
Mounting cameras outdoors can be challenging, requiring understanding different types of equipment and methods. In this guide, we teach this...
HID Favorability Results 2019 on Feb 21, 2019
HID favorability results were strong, in the 2019 IPVM integrator study of 200+ integrators, with a net +62% and low negativity as the table below...
First US State, Vermont, Bans Dahua and Hikvision on Feb 21, 2019
The first US state, Vermont, has issued a ban on a number of Chinese and Russian manufacturers including the world's 2 largest video surveillance...
ADI 'SAVE BIG' On FLIR And Hikvision Examined on Feb 20, 2019
One is a major US defense supplier. The other is owned by the Chinese government. But you can "SAVE BIG" on both at ADI. In this note, we...
BluB0x Company Profile on Feb 20, 2019
BluB0x has doubled in revenue every year since its founding in 2013, according to CEO Patrick Barry. We originally reported on them in 2015. At the...
Massive Leak Of Chinese VMS Provider Exposes Xinjiang Surveillance on Feb 20, 2019
A subsidiary of China’s claimed largest VMS provider is tracking the precise location and ethnicity of millions in China’s Xinjiang region,...
Security Installation Tools Guide - 22 Tools Listed on Feb 19, 2019
In this guide, we cover 22 tools that security installers frequently use. This is one part of our upcoming Video Surveillance...
Sales Cuts At Rasilient on Feb 19, 2019
Over the past 2 years, video surveillance storage specialist Rasilient has expanded its workforce significantly, aiming to build its own branded...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact