Avigilon Wastes $39 Million on Stock Buyback

By: John Honovich, Published on Jul 14, 2015

Avigilon is investing - in their own stock.

Over the past 2 months, Avigilon has spent nearly $40 million buying back their own stock.

In this note, we examine:

  • How they have 'profited' $22 million doing this
  • Why they undertook this endeavor
  • How this impacts their future growth plans

******** ** ********* - in ***** *** *****.

**** *** **** * months, ******** *** ***** nearly $** ******* ****** back ***** *** *****.

** **** ****, ** examine:

  • *** **** **** '********' $22 ******* ***** ****
  • *** **** ********* **** endeavor
  • *** **** ******* ***** future ****** *****

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

Profited $**+ *******

** ****,******** ****** $*** *********** *********, ******* **** shares ** $** ****. Now, ******** ****** *.* million ****** **** ****** investors ** ** ******* price ** $**.** *** share, ********** **** $** of '******' *** ***** and * ***** ** more **** $** *******.

** ******, ** *******, Avigilon's ***** *********, ******** this ***********. ***********, ****** money *** ** ***'* investors ** * **** long-term ********.

*******, ** ******** ** making ***** *** ****, Avigilon *** ******* *** number ** ****** *********, which *********** ******** ******** per ***** **** ** total ******* ****** *** same.

But ****** *****

*******, *** ***** ** trading ** ~$**.** ** November ****, ***** **% lower **** **** **** bought *** ****** ** the ******. **** *** further ***** ***** *******, the ********* *** *** stop *** **** *** Avigilon *** *** **** funds *** ********* ** other ********.

Why **** ********* ****

******** ** ******** **** against ***** ******* ***** price. **** **** ******* the ***** ***** *** under $**, **** **** stopped *** *** *** to *** ** ******* requirements, *** ***** *** ~$18.50. *****, *** ***** is ~$**.**, ** ***** in *** ***** ******* below:

** *** ******** ****, it ********* *** ****** stabilize *** *****.

Growth ******

******** *** $** ******* in ****, ** ****** ** ** ****. *******, ******** ********** * $*** ******* credit *************** **** ****, ****** $80 ****** ******* **** to **** *** *********** purchase.

*** ~$** ******* ********* cuts *********** **** ***** former '********' *** ****** future ***********. ****, ***** the ******* ** ***** price *********** ********** ******, ******* *** ****** would ** **********.

Q2 *******

**** ** *** ********'* Q2 *******. ***** **** they ***** ~$** ******* buying **** ***** *****, they ****** *** * great ******* ** **** they **** ******* ***** share ***** *******.

****** - ** ******* moderately ************ *********. ***: ******** **** ******* ******** - ** ****

Comments (10)

Given that they spent ~$40 million buying back their stock, they likely had a great quarter...

You know, of course that if they bought the stock back because they knew they were going to have a 'great' quarter, as you seem to imply, it would likely be considered insider trading and therefore illegal?

That's not my understanding especially since the rules prohibit buy backs before the end of the quarter (when a company would know for sure what the exact numbers were).

There's nothing here that I understand violate any rules.

I am simply saying that committing to such a purchase implies that they are confident that results are going to be good. But who knows, maybe they are trying to buy time. We'll see when the results are announced.

I would personally be surprised if the numbers were not much better than last quarter, given this initiative.

Well.. I guess that they definitely knew they would have a great quarter... So.. is this an Insider Trading?

http://avigilon.com/press-tools/press-releases/avigilon-corporation-reports-record-second-quarter-2015-results?hootPostID=70f6ddf01e68dc263415a5ddd72cc1d4

No, not insider trading at all.

Also, stock price is down this morning after the results were released, so evidently not that great of a quarter.

Apparently they missed the street earnings estimate by a nickel...

But this is a good example of where they certainly could have gotten in trouble had they decided to buy at the precise moment they did because of knowledge that wasn't public yet.

Something like the patent enforcement program being announced...

A company that buys back it stock is simply stating that it belives that the stock is undervalued.

If they have a great quarter it says that they are right.

That's not my understanding especially since the rules prohibit buy backs before the end of the quarter (when a company would know for sure what the exact numbers were).

Do you know exactly what day the trading was stopped because of the coming end of the quarter? IMHO, it would appear that it didn't stop until at least the opening bell of the 29th of June.

Here's why:

2,100,000 - 360,000 = 1,740,000 (Total shares sold minus shares sold by 5/21)

17,740,000 / 66,726 = 26 days (Shares to sell / max. daily volume)

There are only 28 trading days between 5/22 and 7/1 (exclusive).

28 - 26 = 2 days.

IMHO, June 29 is therefore the earliest date they could have stopped, and that's assuming were able to trade the absolute maximum everyday since May 21.

Do you agree and/or do you have any detail regarding the schedule of the 2.1 million shares?

Yes, I reviewed the schedule of buybacks - last day in June they bought was June 22nd.

Is that a public document/can you share?

I'm curious if they exceeded the supposed daily limit or if one of my numbers is wrong.

FWIW, it's unlikely that they stopped when they did because of end of the quarter blackout requirements for two reasons.

  1. End of quarter blackouts for the TSX typically extend from 1 week after the end of the quarter to 1 day after results are reported.
  2. They were permitted to buy even during blackout periods using their designated broker thru pre-determined programmatic trades which may take weeks to execute and are generally irrevocable.

They are of course not allowed to buy, nor create a programmatic broker buy, while in possession of any non-public material information.

Therefore assuming that these rules were followed, the fact that they bought $40 million at this point should not indicate a better quarter than the street is already expecting.

But I like you am expecting a 'great quarter'.

On another note it appears that they may be able to exceed their 66K volume restriction once a week with block trading. If you have the dailiy volumes in front of you, you may be able to check that.

Login to read this IPVM report.

Related Reports

Wyze Raises $10 Million, Now $15 Million, And Seeks Services Expansion on May 27, 2020
Wyze has raised $10 million, the company's first disclosed raise since the...
Motorola Acquires IndigoVision on Mar 17, 2020
Motorola owns Avigilon, an end-to-end video surveillance solution. Now,...
OnSSI Founders Return, Start Corsight on May 25, 2020
The OnSSI founders are back, less than 2 years after selling OnSSI to...
Qumulex Presents Unified VMS and Access Control on Jun 08, 2020
Qumulex presented its unified video management and access control system at...
Canon Company Milestone Takes $1+ Million PPP Money on Jul 16, 2020
Milestone, a Canon company, took $1 million+ in PPP loans, despite being part...
65+ Security Industry Companies Take $50 Million PPP Funding on Jul 15, 2020
65+ security industry companies have taken more than $40 million in PPP...
Proxy Acquires Ring Maker Motiv on Apr 29, 2020
Fresh off of raising $42 million, access startup Proxy has acquired...
Openpath Raises $36 Million on Jul 16, 2020
Openpath has raised $36 million as 2020 has become a boom year for access...
PSIM CNL Acquired By Everbridge on Mar 09, 2020
The end has finally come for CNL. Despite for years saying they would...
Proxy Presents Mobile Credentials For BLE Devices and Access on May 29, 2020
Proxy presented Mobile Credentials For BLE Devices and Access at the May 2020...
Start-Ups Online Show May 2020 - On-Demand Recording of 40+ Company Presentations on May 15, 2020
All 40+ presentations can now be watched on-demand, with 20+ hours of...
Proxy Raises $42 Million on Mar 17, 2020
Startup Proxy has raised $42 million, an astounding amount for the access...
Video Surveillance 101 July Course - Last Chance on Jul 15, 2020
Friday, July 17th is your last chance to sign up for the July 2020 Video...
Openpath Presents Two Door PoE Controller on May 21, 2020
Openpath presented its new PoE controller at the May 2020 IPVM Startups...
Motorola Solutions Speaks on Avigilon / Video Strategy on Feb 04, 2020
2 years ago Motorola Solutions acquired Avigilon for a billion dollars but...

Recent Reports

Dangerous Hikvision Fever Camera Showcased by Chilean City on Aug 07, 2020
Deploying a fever camera outdoors, in the rain, with no black body, is...
"Grand Slam" For Pelco's PE Firm, A Risk For Motorola on Aug 07, 2020
The word "Pelco" and "grand slam" have not been said together for many years....
FLIR Stock Falls, Admits 'Decelerating' Demand For Temperature Screening on Aug 07, 2020
Is the boom going to bust for temperature screening? FLIR disappointed...
VSaaS Will Hurt Integrators on Aug 06, 2020
VSaaS will hurt integrators, there is no question about that. How much...
Dogs For Coronavirus Screening Examined on Aug 06, 2020
While thermal temperature screening is the surveillance industry's most...
ADT Slides Back, Disappointing Results, Poor Commercial Performance on Aug 06, 2020
While ADT had an incredible start to the week, driven by the Google...
AHJ / Authority Having Jurisdiction Tutorial on Aug 06, 2020
One of the most powerful yet often underappreciated characters in all of the...
SIA Coaches Sellers on NDAA 889B Blacklist Workarounds on Aug 05, 2020
Last month SIA demanded that NDAA 899B "must be delayed". Now that they have...
ADI Returns To Growth, Back To 'Pre-COVID Levels' on Aug 05, 2020
While ADI was hit hard in April, with revenue declining 21%, the company's...
Exposing Fever Tablet Suppliers and 40+ Relabelers on Aug 05, 2020
IPVM has found 40+ USA and EU companies relabeling fever tablets designed,...
Directory of 201 "Fever" Camera Suppliers on Aug 04, 2020
This directory provides a list of "Fever" scanning thermal camera providers...
Face Masks Increase Face Recognition Errors Says NIST on Aug 04, 2020
COVID-19 has led to widespread facemask use, which as IPVM testing has shown...
Dahua Loses Australian Medical Device Approval on Aug 04, 2020
Dahua has cancelled its medical device registration after "discussions" with...
Google Invests in ADT, ADT Stock Soars on Aug 03, 2020
Google has announced a $450 million investment in the Florida-based security...