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AVID stock is ready to go up?!?

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Re: AVID stock is ready to go up?!?

Postby The Red Bladder » Thu Aug 08, 2019 3:17 pm

The Q2 results were in on Monday and were not disastrous - but the $10+ share price was a bubble based on wild hopes and dreams of revenues to come and these didn't happen. Revenue in the second quarter was essentially flat at $98.7 million, missing the consensus estimate of $101.3 million in sales. Avid's guidance called for $97 million to $105 million in Q2 sales. E-commerce revenue increased 19% and recurring revenue accounted for 58% of sales on a trailing-12-month basis. That all translated into adjusted earnings per share of $0.02 and not the $0.04 per share in adjusted profits that analysts were expecting.

And prior to the results for Q2, the share price closed at a nervous $9.68. Then came those results and it opened at $8.15 and by the end of play, the referee blew the whistle at $6.13.

So mildly disappointing results, continued losses and a sideways drift (i.e. normality!) has been resumed. Right now the share price is bouncing off a $6.50 low, so it looks as if all those who wanted to sell-off have done so and the rest are holding for now at least.

Avid has negative shareholder equity (liabilities exceed assets) and this is a more serious situation than just having a high debt level. Avid's debt level continues to increase and is not properly covered by operating cash flow (it is at 9%, i.e. less than a healthy 20% of total debt).

In short, Avid is making a loss, thereby endangering interest payments which are not properly covered by earnings. There is a covenant on those debts of about $300m that could, in theory, trigger a collapse or a take-over.

Anyway - people have been predicting the imminent demise of Avid for about ten years and the company is still here and still trading. The question I must ask is - is Avid a zombie company or a cockroach company? In other words, is it the walking dead or is it just unkillable?
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Re: AVID stock is ready to go up?!?

Postby DC-Choppah » Thu Aug 08, 2019 9:44 pm

The Red Bladder wrote:Revenue in the second quarter was essentially flat at $98.7 million, missing the consensus estimate of $101.3 million in sales. Avid's guidance called for $97 million to $105 million in Q2 sales. E-commerce revenue increased 19% and recurring revenue accounted for 58% of sales on a trailing-12-month basis. That all translated into adjusted earnings per share of $0.02 and not the $0.04 per share in adjusted profits that analysts were expecting.

That just means the 'analysts' were wrong and AVID did what they said they would. The difference was a small amount, but since the EPS was so close to break even ($.02) it registered to some analysts as -50% earnings surprise which some trades use as an indicator.

I guess that means if the balance sheet was just slightly different and the EPS came in instead at say $.005 that the analysts would have called that a -400% earnings surprise?!? of course that makes no sense since it is a small difference in earnings.

Those EPS surprise numbers don't make any sense when the earnings are right near break even.


No matter. My stops were hit right away as soon as it started to fall so I locked in my profits. Then when the stock hit bottom I bought it up at $6 /share since I knew folks would figure out this trading indicator error. There is nothing different about the AVID picture than before.

Up about 8% today.

It will be fun to watch it go back up again before the next round of earnings.

This is why trading these kinds of stocks is fun because the 'analysts' don't know what they are doing. Their standard tools don't work and make for lots of opportunities like this.

See you next time!
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Re: AVID stock is ready to go up?!?

Postby The Red Bladder » Fri Aug 09, 2019 8:11 pm

You are (IMO) definitely dealing with Avid stock in the right way - it's a swing trade and not a 'hold'.

However -
DC-Choppah wrote: There is nothing different about the AVID picture than before.
Oh yes, there is! Debt is increasing steadily and exceeds market cap. Add to that $84m in piled-up physical assets and unsold inventory.
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Re: AVID stock is ready to go up?!?

Postby Zukan » Sat Aug 10, 2019 11:09 am

Interesting thread.
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Re: AVID stock is ready to go up?!?

Postby DC-Choppah » Fri Nov 08, 2019 10:44 pm

Weeeeeee

This is a fun stock.

Went way up 13.5% today after they simply announced that they were on track and software subscriptions are increasing.

https://seekingalpha.com/article/430448 ... quote_news

Hope some of you guys were in.

I bought in big at $6 after last earnings call drop and made 29% profit in one quarter. I am holding half until after next earnings call to lock in those profits.

Set your limits and stops in a good place to capture the next big spike if you missed this one.

Will be interesting to see how folks buy in and the price goes up over the next few months. Today's big spike in price will attract some new traders where this stock starts to appear on their radar. The stock has been trading very thinly recently but now will grab trader's attention.

The more new investors pile in over the next quarter and drive the price up, the harder it will fall if it drops.

So you have to use your judgement to decide if you should go long or short for the next one. I think they will do OK next time so I am long.

Who says there's no money in music?
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Re: AVID stock is ready to go up?!?

Postby OneWorld » Mon Nov 11, 2019 8:44 pm

Sell now, I am about to invest, and I always back losers, it must be in my genes or something
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Re: AVID stock is ready to go up?!?

Postby DC-Choppah » Fri Dec 13, 2019 10:14 pm

Up 5.5% today to $8.64

So I am up 44% for the shares I bought at $6.00 after the last dip and have held on to.

This stock is refilling that last big gap down based on nothing more than business as usual and new swing traders entering the market.

Stay in and plan for an OK report next year and you will make some good $$$ along with the hedge funds and other traders playing this game. You will have to decide to cash out before the report or after.

If you go out after, put in a stop to catch it if it falls fast. Be happy either way.

You will need to find a place to park that new boat!
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Re: AVID stock is ready to go up?!?

Postby DC-Choppah » Sat Jan 18, 2020 12:36 am

Trading at $9.16 today.

OK, if you got in over the last months you are in the money now and are beating the market.

I got in at $6.00 in August, so would be up 52% in 6 months if I cash out now.

If you believe next earnings report will be a bust, then,
now is a good time to set a stop at a place below where it is trading now. If it stops-out be happy. If it goes up, bring your stop up with it (trailing stop). Let it stop out before the report and don't be in it across the gap.

If you believe next earnings report will be good, then ride it out. If you are wrong and it sinks, have a stop set to catch it when it falls so you still make money. Wait until it bottoms out and buy it up at the low price and play the next round just like this one.

Either way you should be locking in these gains now.
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Re: AVID stock is ready to go up?!?

Postby ManFromGlass » Sat Jan 18, 2020 2:20 pm

I find this fascinating although there are some terms I must look up.
I assume that you must also have some stocks in your portfolio that are not performing as you had hoped so on average are you up, down or breaking even? (I don’t know the correct investment terms)
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Re: AVID stock is ready to go up?!?

Postby DC-Choppah » Sat Jan 18, 2020 9:07 pm

I made 42% gross annual compounded return (CAGR) last year.

Stocks like AVID help me get there. But the market (VOO S&P index) made 22% by itself.

So to do better than the market you have to trade some stocks that move faster than the market itself - like AVID and many others.

AVID is hovering between making money and going out of business so it swings back and forth nicely. The analysts are clueless in these cases.

Musicians understand rythm, tempo, and swing and groove, so I hope some musos are following along here.
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Re: AVID stock is ready to go up?!?

Postby Blazzoblaster » Sat Jan 25, 2020 10:35 pm

DC-Choppah wrote:I made 42% gross annual compounded return (CAGR) last year.

Stocks like AVID help me get there. But the market (VOO S&P index) made 22% by itself.

So to do better than the market you have to trade some stocks that move faster than the market itself - like AVID and many others.

AVID is hovering between making money and going out of business so it swings back and forth nicely. The analysts are clueless in these cases.

Musicians understand rythm, tempo, and swing and groove, so I hope some musos are following along here.

Personally, I would take profits as the stock is trading at the ceiling of resistance. For OVER 10 years now the stock has been range-bound. The stock failed to hold 9.55 and it will most certainly test support at ~7.50 a share if it fails that LOOK OUT as the next support level is ~6.5 a share. The stock hasn't traded above $10 in a couple of years and in this economy with the market really booming I would say that the prospects of it crossing that level is NIL
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Re: AVID stock is ready to go up?!?

Postby DC-Choppah » Sat Feb 15, 2020 2:44 am

Based on Mr. Blazzo's excellent analysis I had set a limit at $9.45 to get out completely.

That hit today so I sold my AVID shares @ $9.45. Thank you Blazzo.


If you have been following this thread, I bought those shares at $6 in Aug 2019. So I am up 57% in 7 months. Once I go over an effective 100% return for a year on any trade I always get out.

I am quite happy with that.


I am now on the lookout for an irrational fall in price on this stock to play the next big swing.


Mr Red Bladder, thank you kindly for your thoughts you have shared.
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