TOP IDEAS: Avante Logixx Inc. (TSXV: XX) is cashed up and
ready to make a bigger splash with more acquisitions. Year-to-date the stock
price is up 44%.
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
Each September we regularly attend the Avante Logixx Inc.
Annual General Meeting (AGM) which is one of the Investorfile blog's Top Ideas from several years back. But this year the AGM had a different feel. How
so? The presentation room was packed with small cap fund managers and analysts
alike keen to hear from the CEO about the Company’s growth plans.
Based in Toronto, Avante Logixx Inc. (TSXV: XX – C$0.46)
provides best-in-class and high-end residential and commercial security
services, including system design and installation, rapid alarm response, alarm
monitoring, video analytics, locksmith services and hardware and secure
transport through the use of advanced technology, with a focus on client
It has been nine months since Craig Campbell was appointed
CEO of Avante Logixx and became a major shareholder in the Company. Mr.
Campbell is a veteran security industry entrepreneur. He was the founder and
CEO of Total Security Management (TSM), a full-service security provider which
grew to become Canada’s
largest privately held security firm, with over 3,000 employees and operations
across the country, after which time it was acquired by Garda World Security.
From the presentation at the AGM, this CEO has a big vision
for Avante Logixx. This includes deploying between C$50 to $75 million of
expansion capital in the first three years of his tenure and to acquire another
beachhead vertical within the security industry, in addition to making tuck-in
acquisitions. The Company already conducted a realignment of its corporate
structure to build a solid platform for future growth and continues to hire
senior officers. Avante Logixx’s Board of Directors has also had some
This vision of growth through acquisitions has already
started to play out. The Company has already completed three transactions over
the summer. The first two were tuck-ins: the purchase of the remaining 49%
interest in Architronics and the acquisition of Watermark Security. Veridin
Systems (with annual revenues of C$5 million) was the third acquisition, which
expanded the Company’s commercial security footprint while gaining large
nationwide accounts. Now Avante Logixx has an annual revenue run-rate that is
approaching C$30 million.
But the Company’s growth trajectory does not stop here.
This month, Avante Logixx announced a C$10 million loan
facility from the Royal Bank of Canada
for future acquisitions. We note that the Company has significant cash on hand
from a recent equity financing and no debt, giving it the financial capacity to
undertake bigger purchase transaction(s) going forward.
The Investorfile blog is of the opinion that there will be
significant M&A activity to take Avante Logixx to the next level, thus
making it a national market leader for high-quality security services. For
small cap investors, M&A could continue to fuel the stock’s valuation this year.
Last week the Company announced a strategic partnership and investment with
3|Sixty Secure Corp., a leading Cannabis security solutions provider. This will
foster new commercial customers from the Cannabis sector for Avante Logixx.
Year-to-date, the stock price of Avante Logixx is up 44%.
Several analysts rate the stock a buy with 12-month share price targets
currently set at C$0.65.
Avante Logixx has about 105.2 million shares outstanding.
Pending is a 1 for 5 share consolidation.
Company website: www.avantelogixx.com
Author Ownership Disclosure: TSXV: XX - Yes
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
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information contained within this article should not be construed as offering
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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.