So.... buy? ;)
Avigilon Is Cash Strapped, Commodity Company, Charges Analyst
Published May 03, 2016 12:53 PM
Avigilon has come under attack by an analyst in SeekingAlpha charging [link no longer available] that the company is 'cash strapped', 'becoming a commodity', with 'extraordinary high' management turnover. The analyst is projecting a 40% drop in Avigilon's stock price.
In this note, we look at the strengths and weaknesses of this article, offering our analysis and outlook on the future of Avigilon.
Poor ******** *********
*** ***** **** ** *** ******* is ******* *** ******'* ******** **************** ** the ***** ************ ********, ********* **** obvious ****** ** ******** ******** ******* their *** ********** ******. ****** ** is ********* **** *** ** ******** to ******* ***** *** ******* ** any ********, *** ******* ** ********* quite ****** *** ************.
********** ********
**** *** *********** ******* ********'************** **** ********** ********, ********* **** *** ******* ******** in *** *** ******.
*** **** ******* ********** *** ***** is ****, ***** *** ** ****, Avigilon *** * **** ********** ****. Indeed, ******** ** ****** *** * COO *** * ********* ********* *** has ***** **** ***** ** ******* *** sales. ** * *****, **** ** certainly * **** *** ******** *** a ******* ** ********'* ****. ** the ***** ****, ** *****, **** only ********** ****** ** *** **** issue.
Cash ********** *******
*** **** ******* ***** *** ******* makes ** ***** ********'* ******* ** generate ****, ******:
** ****** ***** ** ********** **** flow, ******** ** ***** ******* - it ********* ** ****, *** ***'* generate **** *** *** *********** ******. One ***** **** ** ****** ** conclude ****, ***, **** ***** **** the ****, ******** **** ******** ****** cash **** ********.
**** *** **** ******* ***********:
********* ** ******* ***** **** **** picture - *** ** ***** ** more ********* **** *** **** ********* window-dressing ********* ** **** [*** ******* Alpha] *******.
Growth ** **** **********
***********, ********'* *** *** ******* ** growing *******. **** ***** **, ******* cash ********** **** ****** ** **********. Indeed, **** ********* *** **** ** a ******** (***** ** *******) ** least ** *** ***** ****** ** a *******, ***** ** ** ************* far **** ********* ** **** ***** and ***** **** ** ** ** extract ********** ***** ******* ** ****.
Cash ********** ***
******** *** ***** ********* *********** **** **** operations, *** **** ****** ***** ** 2015, **** ******** ****** ******** *** cash **** **********. ** ********, ******** used ~$*** ******* *** *********** **** *** **** 2 *****, ********* *** ** *******, the new ** ********, ***. *********, *** former (**********) ** **** * ******* than *** ***** ***** *********** *** very **** ******** *********** **** ** the ******.
Turning ** **** **********
** ******** **** *** ******* *** believe ******** *** ********* ******** **** from **********, ** *** **** **** choose **. ***** ******** *** ***** competitive, *** ***** *** ************ *** have *** ******, **** ***** ***** surveillance ************ **** ***** *** ******** ****** and *** ***** ******** *********** ********* cash (*.*., ******* ****** ********** ** ** $** ******* ****).
Risk ** ******* ****** *** ****
********'* *** *** **** ************ *****, right ** *****, ***** *** ***** for ******. *** ******* *** ****** in ******* *****, ******** ** * $300+ ******* *** ******* *** * top **** ********** ** *** ****** video ************ ******.
***, ********'* *** *** **** *** to ** * ***** ****** *** bluffs *** **** *** **** **** bad *****. ** ** *** **** when ** **** **** *** ** think ******** **** *** ******* ** progress.
Avigilon ** *******
** *** ***** ****, ** *** analyst ********, ** ***** **** ******** has ****** *******. *** *** ** even **%+ ********** ******* ****** (****** about **% ** **%) **** ******** never ******. ********'* *** ******* ****, especially *** **** **** *** ********** their ******** ******** ******, ********* *** *** lucky ************ ** *** ******** ****** over *** **** *** ***** **** has ******* *** **** ******** ****** reported ******.
* *** ******* ******* *** ***** lower ******:
- *********, ***** ***** ***** ********* ******, is *** * *********, **** **** 4MP ******* ******** $*** *****. ******** still ** ****** ** *** **+ segment *** **** ** * **** narrow ***** **** ***** ******* ****.
- ********* *** *****, *** ** ***** in *** **** **** **** **** analytics, ** ** ******* **** *** revenue ****** **** ** ******* **** were.
- ******** ** ************ ********* ** *** channel *** ***** **** **** * competitive, ********** ******* *****, ** *** fundamentally **** ***** ** ****.
- ********* ** ****** ******** ** *** bottom, ******* ********, ****, ***. *** of *** *** ** *** ***.
Strength ** *** **** *** ******
******* ***** ******** *******, ******** *** one ** *** ******* ******* *** to *** ********* ** *** ****** (e.g., *** **** ************ ** *** top * ** ****'* ********** ********* of*******,***************) *** **** ** *** ******* are ********** ******* ** ******* *** $6.45 ****, ***** **** ****** **** high *** ****** **** **** *** power *** ************ ** **** ******** offers.
******* ** ****, ******** **** ******** to **** * ****** ******** *** many ***** ** ****, ****** ** blows ****** **, **** ******** ********* and *********.
Cash **********
*******, ** ******* *** ***** **** Avigilon ** ********** ************. *** ***** and ********* ****** ** ****** ********* decelerating, ** *** *******. ****, ********'* historic ****** ******, **** *** ******* ****, ******* ***** ***** ******, **** **** *** **** ****.
** *** **** ** * ***** sign **** ******** *********** **** ********** more **** ** ************ ********* ** they ****** * ****** ********.
Projection: ******** *****
****** **** *******, *** ********** ******* Avigilon *****, ** ***** *** **** likely ******** ** *** **** * years ** **** ******** ** ******** / **** ***.
**** ******** ***** **** *** ********** expansion ************, ******** *** ********* ******** positive *********** ****. ** *** ***** of **** *******.
** *** ***** ****, ********** ** know ***** ********'* *** ****** ** him ******* ** *** **** ******, early *****, ******** *********. ** *** contrary, *** ** ***** ************ ****** has ******* * ***** ** ***** growth, ****** ***********, *** ********'* ****** ship ***** ** ****. ** ** not ******* ********'* *** *** *** interest ** ** *** **** **** major ******** / *** ** * company ***** ~**% ****** *** ~**% net *******.
** ********* **** **** *** ******* ** *** **** *********, ** believe ******** **** **** * ********** attractive *********** ***** *** ***** **** can ***. ***** *** ****.
Comments (6)
Armando Perez
May 03, 2016JH
John Honovich
May 03, 2016Lol, IPVM does not make stock buying recommendations.
I will say I think the probability that Avigilon gets bought for ~$20 is more likely than the price goes down to ~$10. Anything can happen, stock market crash, recession, Avigilon CEO makes a wild bad new acquisition, etc., etc.
But the stock is ~$16, down more than half from its 2014 peak and far worse video surveillance manufacturers than Avigilon are getting bought out for richer valuations (e.g., Mobotix) so there is clearly upside potential unless Avigilon blows it or the whole market collapses.
U
Undisclosed #1
May 04, 2016JE
Jeremy Ellis
May 03, 2016As bad as the article is on industry finer details, to me it appears to be a planned attack. Drive down stock price further, then announce buy back.
Luis Carmona
May 03, 2016Jeremy, are you implying there is manipulation and biased information posing as credible resources in our financial system?
Tyler Blake
May 04, 2016CEO wants to liquidate either through selling shares or an acquisition to cash out. At best Avigilon trades sideways. Sell some strangles or Iron condors then to make money for the time being.
Problem is that the options for Avigilon stock are nonexistent and relatively illiquid.