AVID stock is ready to go up?!?

[DC-Choppah]

Focusright (TUNE) is up to 970 (GBp) today, and has essentially doubled since March of this year and is up 365% over the last 3.5 years.

TUNE vs AVID is an interesting comparison.

It seems that the stock market sees Focusright as a better investment than AVID, so this is reflected in its price. TUNE is actually trading with 10x more volume (by dollar) than AVID is.

These stocks are so different in the way that they are traded, but also are in the same market, I need to work out a way to trade them together to make for a good combination.

If anyone has any good ideas of how to trade these together that would be interesting.

My basic hypothesis is that AVID will remain highly volatile. TUNE will be much less volatile. Their market is similar so if an event happens in the market it would effect them both similarly.

[The Red Bladder]

Nobody cares about what branch a company is in. Some make a profit and some are loss-making zombie basket cases.

[ManFromGlass]

I’m thinking gold doubloons, unless I find a crystal ball that works.

[DC-Choppah]

Nobody cares about what branch a company is in. Some make a profit and some are loss-making zombie basket cases.

If a publicly traded company is a loss making zombie and overpriced, then you can short it and do much better than the market.

For example, a short position on LYFT at their IPO has made 300% return in 1.5 years. Those who had the insight that the LYFT business plan was flawed did very well indeed.

AVID is different since it goes up AND down. It is actually more interesting to trade. And yes it can be timed as this thread shows.

Doing better than 'Buy and Hold' is the goal of trading. There is a rhythm to the market once you get the feel for it.

I appreciate the observation that AVID is a zombie. That means it has unique opportunities for trading, which can result in very good returns, even higher returns than buy and hold of a profitable company during the same period.

[DC-Choppah]

I’m thinking gold doubloons, unless I find a crystal ball that works.

You don't need a crystal ball to know when the downbeat of the next measure is going to be. If you understand the rhythm behind the market you can do well without a crystal ball.

[The Red Bladder]

I appreciate the observation that AVID is a zombie. That means it has unique opportunities for trading, which can result in very good returns, even higher returns than buy and hold of a profitable company during the same period.

Buy and sell points should be somewhere around $5 and $8. Just do not get caught holding stock when the depression hits and the markets implode!

Weare heading full-tilt into a downward deflationary spiral, triggered by irresponsible central banks, profligate governments, C19 hysteria and Brexit.

Don't be too surprised if this time next year unemployment in the UK is around 20% or possibly far higher.

[DC-Choppah]

Trading now near $14.

Been steady at $12 range for a month.

The stock has found a new mean value. But you will note that this is purely speculative since the higher stock price has driven up EPS into the $33 range. So future earning are being anticipated here.

That means the stock will be punished if it does not deliver on that promise since those anticipated earnings increase are now built into the price.

[DC-Choppah]

Avid has never been this high since around 2007!

Trading today at $21.71

I am still NOT in. No Harm, I am making money elsewhere.

Feels like a bubble to me. I will stay out and wait for a big fall.

Glad to see it has support at such high levels though.

[The Red Bladder]

Feels like a bubble to me.

Not just to you!

A stock-price crash could lead to a dollar crash as all that money from outside the US rushes out of the market and repatriates to China, Norway, Russia, Middle East, etc., etc. and is turned into Euros.

The current market price hysteria is not driven by the institutional investors, but by the OTC-Reddit crowd and (bizarrely) by the Fed itself, as it seeks to keep the economy afloat by buying up company bonds, regardless of the ability of those companies to ever repay them! Add to the madness the fact that about 60% of all mortgages in the US are now owned by the Fed as it has been buying up all the Mortgage-Backed-Securities (MBS) and the Fed sent out a memo last week to the clearing banks to check their systems for being able to calculate negative interest rates - and the sheer size of the bubble begins to emerge.

It's beginning to look as though the US stock market will 'correct' around April and will stay down for a couple of years. When I say 'correct', I mean lose around 40% or more and that will have a profound effect on GDP.

The good news is that with the C19 crisis over by the beginning of 2022, the real economy can start to recover. All that QE meant that bogus money was pouring into assets such as stocks and housing and that also sucked money out of the real economy and into the financial (bogus) economy.

Zombie companies will fail, houses will be repossessed and you will hear the wailing and the gnashing of teeth as a great deleveraging takes place.

[DC-Choppah]

The traders are part of the market and since they influence the price, then that has to be taken into consideration when determining the price. The traders like AVID so they trade it back and forth. That is part of the stock's value, that it can be traded. If it just sat there and didn't move it would not attract traders. So it's volatility is part of its value.

But this value that traders place on the stock is transient. It adds to the volatility at all time scales, but does not change the fundamental value of the company.

The other factor for the price is the fact that the company hovers near break even.

So have the fundamentals of AVID changed or the outlook for the future changed to warrant the new high price?

Up to $23 now!

[The Red Bladder]

So have the fundamentals of AVID changed or the outlook for the future changed to warrant the new high price?

A quick cut-n-paste from the ticker -

Ticker: AVID
Exchange: NasdaqGS
Founded: 1987
Industry: Technology Hardware, Storage and Peripherals
Sector: Tech
Market Cap: US$1.023b
Shares outstanding: 44.21m

Assets

Receivables
US$75.0m
Long term & Other Assets
US$58.9m
Physical Assets
US$50.0m
Cash & Short termInvestments
US$49.1m
Inventory
US$28.4m

Liabilities
Debt
US$208.2m
Other Liabilities
US$184.0m

REWARDS
Earnings are forecast to grow 24.4% per year
Became profitable this year

RISKS
Interest payments are not well covered by earnings
Negative shareholders equity
Large one-off items impacting financial results
Shareholders have been diluted in the past year
AVID's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.

PE vs Industry: AVID is poor value based on its PE Ratio (52x) compared to the US Tech industry average (26.4x).
PE vs Market: AVID is poor value based on its PE Ratio (52x) compared to the US market (21.5x).

Short Term Liabilities: AVID has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: AVID has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.

Debt Level: AVID has negative shareholder equity, which is a more serious situation than a high debt level.
Reducing Debt: AVID's has negative shareholder equity, so we do not need to check if its debt has reduced over time.
Debt Coverage: AVID's debt is not well covered by operating cash flow (13.1%).
Interest Coverage: AVID's interest payments on its debt are not well covered by EBIT (2.3x coverage).

Current Dividend Yield Vs Market & Industry
Notable Dividend: Unable to evaluate AVID's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate AVID's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Ownership Breakdown
Individual Insiders 6.3%
2,795,907 shares
Hedge Funds 15.6%
6,881,793 shares
General Public 23.2%
10,261,595 shares
Institutions 54.9%
24,268,824 shares

[DC-Choppah]

Earnings report today. Will be interesting to see how the market responds.

Benn holding steady around $20 for a while now.

I am still out. But if there is a big dip, I plan to buy it. Still out for now.

DC

[DC-Choppah]

Oh man 20% jump straight up!
The market loves AVID!!

The market loves the growing revenue and increases in subscriptions. The subscription business model is working.

I am not sad that I am missing this because I am making good money elsewhere.

Hope some of you are in!!

Great for AVID!

[DC-Choppah]

I got back in at $27 since the stock now has momentum.

It is starting to show up as a momentum stock and is attracting new investors. The new money makes the price go up. One year with all quarters showing positive earnings also attracts some new investors looking for growth.

So far so good, trading around $34.50.

I have a stop set back at $29, so I don't lose any money and would make about 7% return. The only question now is how high will it go?!?

If I can lock in 7% profit, and be exposed to a potential large upside, I'll take it.

Thanks Avid!

[ManFromGlass]

I didn’t get the memo! Darn!

[DC-Choppah]

This stock keeps attracting new investors which drives the price up.

In this environment a trailing stop is a good way to play.

So I just moved my stop up from $29 to $34.45.

That means I have now locked in a 27% profit (in 1 month!) and am exposed to the full upside of the stock.

It is always possible that it would drop like a rock and there is no way to 'catch the falling knife'. So to cover that possibility, I have changed my stop order to a stop limit order.

The stop price is set at $34.45 and the limit price is $29. This means that if the stock drops like a knife, I will catch it in between $34.45 and $29 but if it falls too fast and goes below $29, then I don't sell. I would stay in and hope it recovers. The wide gap between the stop and limit assures that the trade should happen, and I still make good money.

Worst thing is to get stopped out and then watch as the stock goes right back up. There are hedge funds that try to make the price do that to 'run the stops' and collect everyone's money who set a stop!

But if new investors are coming in fast, it makes it much harder for a big player to run the stops.

Go Avid! At $37.08 now.

[The Red Bladder]

Now would be time to sell. The market sell-off looks as if it might be coming, possibly within days.

[The Red Bladder]

BTW, when the markets do start to trouser, they will bounce down, so there will be many false bottoms that will lure the foolish into buying in, thinking that when stock prices halve, that is a buying opportunity. It will go away lower than that and will stay down for quite some time. Most stock pundits think 2022 will be a very bad year and reentering the stock market should be done well after that time and looking for value stocks only.

What we have at the moment is definitely a bubble and the debt cycle is 90 years, so it's 1930 all over again!

[DC-Choppah]

Closed at $39.19 today.

I slid my stop up to $36.85 with a limit of $36.00 Hopefully that will catch if there is a falling knife. So I am using a trailing stop/limit to capture the run up.

I would be up about 27% in one month if the stop triggers tomorrow. If the stop does not trigger, I let it run and keep sliding it up.

I have learned to only use stops when they trigger a transaction that is in the money and not use stops for losses.

[DC-Choppah]

I got out at $39.00.

So I made 44% profit in 1.5 months.

No complaints. Thanks Avid.