TOP IDEAS: Once a turnaround play, Avante Logixx Inc. (TSXV: XX) has an eye for making strategic acquisitions. Stock is up 73%.

Investorfile's share price accumulation target of $0.40 for Avante Logixx Inc. was reached on January 7, 2014. For the record, we do not revise share price targets for our Investorfile Top Ideas - Small Cap Value Stocks. We have positioned our blog to be one of the first providers of a pragmatic perspective of a small cap company stock's potential worth, where there may be uncovered value that has been largely overlooked by the investment community.

We admit, our initial motivation to invest in shares of Avante Logixx Inc. (TSXV: XX - $0.38) was the value in the stock price when the Company became profitable. (See - Avante Logixx: Post-turnaround stock provides value for growth investors). But now there is another reason to own this stock.

Avante Logixx provides best-in-class residential and commercial security services including system design and installation, rapid alarm response, alarm monitoring, video analytics and secure transport through the use of advanced technology and a focus on client service.

Avante Logixx was once a turnaround project several years ago. Then the new co-CEO and major shareholder (George Rossolatos) committed to renew the Company's focus in servicing its security market niche by steadily increasing its recurring revenue stream generated from monthly security monitoring fees in order to grow profitably and build cash.

The cash being generated from the successful turnaround of the Company's operations and the closing of a $5 million equity financing last year provided Avante with the financial resources to grow faster. Today Company Management believes there are significant opportunities for Avante to grow through acquisitions and to consolidate the security industry, build market share and recurring revenue streams while improving operating efficiencies with the view to increase shareholder value.

The question becomes: Can the management team who executed Avante's turnaround grow the Company by successfully making and integrating acquisitions?

Early indications are: Yes!

Avante Logixx recently reported fiscal 2015 Q3 financial results and held an investor conference to discuss the same. These quarterly results fully reflect the Company's first acquisition: INTO-ELECTRONICS (INTO), a Toronto based commercial and high-rise security integration, monitoring and electronic building management firm. With the inclusion of INTO, Avante's revenues jumped 30% to $2.95 million for the quarter, of which the recurring revenue portion rose 40% to $1.12 million, comprising 38% of total revenues.

With the acquisition of INTO, the financial outlook for Avante Logixx is robust. Key takeaways from the Q3 results, Management Discussion & Analysis( MD&A) and investor conference call confirm this notion:

1. Avante expects significant growth in fiscal Q4-2015 (March 31) and fiscal Q1-2016, both in the recurring revenues stream as well in revenues from security installations. INTO has a growing backlog and the revenue contribution to date is tracking higher than management previously expected.

2. Significant cost savings will materialize over the 6-12 months as INTO and Avante consolidate their business administration and security monitoring operations within Avante's existing facility.

3. The cross-selling opportunities between Avante and INTO as envisioned at the time of acquisition are beginning to crystallize.

Even more interesting (from management comments on the investor call) Avante continues to actively pursue numerous acquisition opportunities, and if all goes well, could close its second acquisition (mostly likely similar in size and scope as INTO) within the next 60-90 days. Management disclosed that the Company has about $5.2 million in cash on hand. Avante has a nominal amount of bank debt.

Since our first blog post about Avante Logixx the shares are up 73%. The stock already exceeded our price accumulation target of $0.40 last year but has retreated a little since. That said, for small cap investors who are still accumulating this stock, in our opinion the current price does not reflect the Company's capacity to close on several more acquisitions. If those acquisitions prove to be successful (like INTO), the stock value could appreciate significantly higher than our original target price of $0.40

Avante Logixx has approximately 74.8 million shares outstanding.

Avante Logixx website: www.avantelogixx.com

Author Ownership Disclosure: TSXV: XX - Yes

Read Disclaimer:

This article is for informational purposes only. This article is based on the author's independent analysis and judgment and does not guarantee the information's accuracy or completeness. The information contained in this article is subject to change without notice, and the author assumes no responsibility to update the information contained in this article. The information contained within this article should not be construed as offering of investment advice. Those seeking direct investment advice, should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock.

Investorfile.com is not engaged in an investor relations agreement with Avante Logixx Inc. nor has it received any compensation from Avante Logixx Inc. for the preparation or distribution of this article.

The author of this article has acquired and may trade shares of Avante Logixx Inc. through open market transactions and for investment purposes only.