Opinions Paul Taylor
Avigilon CorpAVO.TOCOMMENTMay 16, 2014
Paul TaylorStock price when the opinion was issued
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(A Top Pick Oct 6/17, Up 48%) It was taken over for $27 in March and the acquirer got a screaming bargain. They do security work at the Rogers center, for example.
Robert McWhirter
(A Top Pick August 22/17 Up 65%) This company is involved in surveillance technology and was recently acquired by Motorola for a nice premium.
Peter HodsonHe likes this. They are ticking every box. Has a strong balance sheet, a property in Vancouver they are looking to sell, and valuation is pretty cheap. Good earnings growth and good revenue growth. They’re also looking at a new business where they are going to be doing software as a service business model, and markets really like software service businesses, because it is high margin, predictable types of revenue. They've been blowing out estimates over the last 2 to 3 quarters.
Video surveillance technology. Just announced they are going to be launching a sort of software service product, and the market loves recurring revenues. Too early to get excited about that, but it’s interesting. They’ve had communication issues with the market in the past, which is what led to a lot of the downdraft. However, they’ve shifted strategies and are now focused on profitability. The last 2 quarters beat earnings estimates by 50% and just shy of 40%. Has a lot of cash on the balance sheet with the sale of a Vancouver property that is just going through now. (Analysts’ price target is $22.75.)
Makes high definition security cameras. They originally started mostly on the hardware side, but now are really starting to move into the software side. The artificial intelligence they have and the bundle between hardware and software is becoming more user-friendly, saving their users a lot of time and labour as well. (Analysts’ price target is $20.)
Bruce Campbell (2)Very interesting and quite sophisticated technology. The problem is, it is a hardware company. They always have a problem of fighting against a better and cheaper mouse trap. A Chinese competitor has been quite aggressive in pricing. He doesn’t like the long-term fundamentals. If he had to choose between a Long or Short position, he would choose the Short.
This used to be a hot stock. It went through some expansion plans using some CapX, which really hurt the company. Technically, it is at resistance level, which is actually quite good. Once it breaks through that resistance level, it would be a good stock to hold onto on a go forward basis.
A provider of intelligence security systems, cameras and related software. It was once a market darling, but has stumbled badly. There has been a bit of a revolving door in the executive offices. Financial governances are not terrific. Credibility of management is a bit suspect, with a history of overpromising and under delivering. Analysts have a tough time with revenue visibility because the product is sold through a network of resellers.
CFO left suddenly and you never want to see a CFO leave right before the earnings announcement. It appears results are quite strong. Explosive growth. The US represents above 51% of revenues. Sales are up at around 65%. Technology is state-of-the-art in terms of Internet protocol security cameras. The challenge is that it trades at nosebleed levels. This is a name he likes.