Absolute Software Corp. (ABT-T)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The acquisition of Netmotion added a lot of debt. The company has historically had net excess cash. They reported a weaker quarter. It is down 50% from highs. Proceed slowly with a partial position. Unlock Premium - Try 5i Free

With the Equifax breach, everyone is back on the band wagon. They have a good solution for security. They have a lot of cash and no debt. Active investors have started to pick away. They own a third and management owns a third. It will get harder and harder to buy the stock. He thinks it will eventually get taken over. (Analysts’ target: $8.50).

Sold his holdings earlier this year because, as the company was entering into a transition point where they are investing more in research development and are in more sales staff, there is going to be a compression and margins in the story would just stall out. Intends to revisit this sometime in 2017. They are holding around $60 million in net cash, so the dividend is safe.

On the short term, this looks like it is more of a Trader than a long-term Hold. There is no definitive trend. When buying a stock which you think is a “buy and hold” stock, you want to see a nice long term trend line for at least 3 years, and hopefully 5 years.

Sold his holdings some time ago, and has not gotten back into it. He is not enamored with this company.

Likes that this plays in the market of cyber Security. It protects the end point. Also likes the company’s board structure. There are some activists in there. This has net cash on the balance sheet and is growing its dividend. Most of its revenue is from the US. They are also going to try to penetrate the financial sector.

(Top Pick Oct 14/14, Up 8.26%) It has been one of his favourites but he sold it some time ago. He took his gains on this one. Model price is $46.76. It got hit with the biotechs. It looks interesting. He can’t say if it makes it into this month’s portfolio picks.

(A Top Pick Nov 10/14. Up 7.97%.) Keeps track of people and their stolen computers and tablets. It continues to narrow its focus. A significant free cash flow generator and continues to rank well in his models. Earnings estimates have been chopped by 63% in the last 90 days and are expected to decline 37% from $.20 down to $.12. PE is 62X. If you own it, consider going into other opportunities.

He has no exposure to Canadian Tech at the moment, but does have exposure to US tech. There are not many companies to choose from. He sees better value and opportunity outside of Canada. There are only a half-dozen tech stocks in Canada that are publicly traded, so sometimes they can get bid up more than they are potentially worth. He prefers dealing in the US.

Chart shows a down period from late 2007 into 2009, followed by a long advance. It may now have digested all of the bad stuff and is now just trying to break out. Looks promising. Comparing this to the XIT-N, it is matching the performance, which is not a bad thing because the XIT is doing rather well.

This is largely a US traded stock, so benefits from the currency exchange. Had quite an aggressive break out. Technically it is a very, very constructive looking chart. He doesn’t own the stock, but might be interested.