You are here

AVID stock is ready to go up?!?

Advice on everything from getting your music heard to setting up a label and royalties.

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

Postby DC-Choppah » Fri May 08, 2020 10:47 pm

Here we go again?

Ok, so recurring revenue keeps going up...Non-recurring revenue goes down (all those cancelled shows). Total revenue goes down. Earnings are negative, but near zero anyway.

Stock trading near the bottom ($6) of its favorite pattern.

They are converting to a steady revenue stream, but I wonder if that stream will end up with them being a smaller company (if it survives to make money)? If so then the value of the stock goes down from here IMO.

Given the continuous increase in the recurring revenue stream, I wonder when the steady revenue flattens and stops growing and at what level? Can new recurring revenue actually grow fast enough to support a higher stock price?

The market keeps thinking it will, then changes its mind. I can play that game forever and make quite a bit of money in the process no matter if it pans out or not. It just can't tank.

So I see it this way, if you think they tank, then stay out. Otherwise, it will repeat its pattern and you can make money on the next swing up, but you will need to get back in now.

I am still digesting and have not decided. I am trying to figure how much more recurring revenue there actually is out there to be had. I mean, that is the only positive thing they have going. Flatten out the recurring revenue, and what do they have?
User avatar
DC-Choppah
Frequent Poster
Posts: 1622
Joined: Fri Jul 20, 2012 12:00 am
Location: MD, USA

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

Postby The Red Bladder » Sun May 10, 2020 4:47 pm

That was just the first quarter and the C19 crisis hardly hit until April, so Q2 is the one to watch.

Those results were pretty much in line with expectations, slow sideways drift IMO. Debts continue to rise and are now at about $470m adjusted for currency fluctuations. That means that income will probably not cover interest payments.

The P&L is dreadful and the company is in deep negative equity of minus $160m. Some of their assets on the plus side are 'iffy' things like receivables ($82m) and inventory ($32m) and they are heading into a very bad downturn in trade and not all their major customers and competitors will survive the journey.

As Warren Buffett famously stated, "When the tide goes out, we get to see who's been swimming naked."

But as you said, earnings are falling and subscriptions are rising, but from a very low base. My underlying feeling is that the damage done by the last three CEOs is just not repairable in the long run. It's a crying shame because it used to be a great company until about 15 years ago.

What happens to Avid will depend greatly on what happens to the rest of the real economy. Right now, we are seeing a major divorce between the stocks, bonds, and financial markets and the real economy in the real world. Parts of the stockmarket are acting as if the C19 emergency has nothing to do with them.

Pretty soon the C19 crisis will catch up with all those nude swimmers who have been loading up with debt and massaging the books.
The Red Bladder
Frequent Poster (Level2)
Posts: 2592
Joined: Tue Jun 05, 2007 12:00 am
Location: . . .
 

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

Postby Ramirez » Sun May 10, 2020 7:58 pm

A lot of audio companies has seeked to take advantage of the current situation. If my Facebook feed is anything to go by, sales of the small Focusrite interfaces must be through the roof. Similarly there a lot of software deals around (and exented free trials). Reaper must be seeing a large increase in downloads too.

Avid, as far as I can see, has done fugger all.
Ramirez
Frequent Poster
Posts: 1148
Joined: Tue Oct 24, 2006 12:00 am
Location: Pwllheli, Cymru
www.stiwdiosain.cymru

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

Postby James Perrett » Mon May 11, 2020 12:04 am

Ramirez wrote:If my Facebook feed is anything to go by, sales of the small Focusrite interfaces must be through the roof.

Focusrite seem to have their supply chain better organised than some of their rivals - currently the 2i2 is about the only interface that is actually available in its price range.
User avatar
James Perrett
Moderator
Posts: 9795
Joined: Mon Sep 10, 2001 12:00 am
Location: The wilds of Hampshire
JRP Music - Audio Mastering and Restoration. JRP Music Facebook Page

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

Postby DC-Choppah » Thu May 14, 2020 12:02 am

Focusrite (TUNE) looks like a stable company. Revenues increase linearly with earnings going up in step.

But as a stock, it appears to me that the price already has success built in. As an investment it is hard to see what will push the stock price higher. Lower I can see though. Or perhaps flat.

TUNE stock is a candidate for shorting. Playing the same swing trade game as AVID but from the other direction.

My theory is that the market has liked TUNE, and it has attracted investors, which drove the price up higher than it should be. This results in spurts of sharp negative drops, and choppy jagged rises. Just like AVID, the downward corrections are always bigger, faster and straighter than the upward ones.

But with AVID, there is this potential that it could turn profitable which would cause the stock to settle to a new higher place. So there are investors trying to catch that event. That biases it towards the positive.

With TUNE that has been played out already and there may be nowhere to go but down. So it seems that the play in the negative direction is more likely. IMO.
User avatar
DC-Choppah
Frequent Poster
Posts: 1622
Joined: Fri Jul 20, 2012 12:00 am
Location: MD, USA

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

Postby DC-Choppah » Fri May 15, 2020 4:17 pm

Avid stock getting comfortable with new lows, high P/E ratio.

I am not in and don't plan to be for this cycle.
User avatar
DC-Choppah
Frequent Poster
Posts: 1622
Joined: Fri Jul 20, 2012 12:00 am
Location: MD, USA

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

Postby DC-Choppah » Tue Jun 09, 2020 12:26 am

Oh, well I missed this ride. I am OK with that.

AVID is trading at $8.33 today and was at $4.92 one moth ago. That is an incredible 70% return in one month.

I attribute that to the market comeback as a whole though. So my other investments were in other stocks that also made great returns during that period. Actually even more than 70%. For example I have been in RRGB which has gone from $5.19 to $19.18 in that same time period which is 370%!

What is interesting about AVID is that it will swing like this even when the market is flat.

Looking froward to the next ride.

Still out. AVID is just not volatile enough for me!


If anyone got back in when it was trading around $5 - $6 this spring, I suggest you now place an exit order to lock in those profits. If it was me, I would place a Stop at $8.05 and a Limit at $9.03. Good to avoid simple round figures or other values that are commonly used. Mix it up a bit to avoid being part of a mass exit which will cause the trade to miss your target price.

If it hits either one, be happy.

Another good trade would be to place the same order but for 80% of your investment. Then leave the other 20% in and place a Limit order at say $10.50 or higher, with a Stop again at $8.05. As Red Bladder notes the next earnings report may yield a big jump in either direction. So if it goes way up, you will make extra profit. If it goes to 0, you still come out way ahead overall, and hopefully catch the knife on the way down. Be happy either way. You are making money for nothing!!
User avatar
DC-Choppah
Frequent Poster
Posts: 1622
Joined: Fri Jul 20, 2012 12:00 am
Location: MD, USA

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

Postby The Red Bladder » Mon Jun 22, 2020 2:16 pm

Be careful! Remember that this stock market is a bubble that is fuelled by the staggering levels of quantitative easing by central banks everywhere, esp. the Fed and the US Treasury's General Account.

In 2017 Capt Bonkers discovered that the GA held 400 billion so he started a round of generous government spending and then hailed himself as an economic genius. Today that account holds about $1.4 trillion!!!

He will probably use on government spending so that he appears to be in charge of a booming economy and get reelected.

But expect a bubble leading up to the US election, followed by the sound of bursting.

Warren Buffett is not buying but has sold all his airline stocks and his Phillips Oil holdings and trimmed Amazon and other tech stuff. Meanwhile, retail traders are panic buying like there's no tomorrow! It's like 1999 all over again!

I made a couple of videos on this coming crisis -

https://www.youtube.com/watch?v=trAXBnralIQ
https://www.youtube.com/watch?v=prWhlPTbdGk&t=3s
The Red Bladder
Frequent Poster (Level2)
Posts: 2592
Joined: Tue Jun 05, 2007 12:00 am
Location: . . .
 

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

Postby The Red Bladder » Mon Jun 22, 2020 3:42 pm

DC-Choppah wrote:For example I have been in RRGB which has gone from $5.19 to $19.18 in that same time period which is 370%!
And now it's at ten and continues to fall.

The market is crazy. It's on steroids, pumped up by all that crazy money and idiots cashing in the 401Ks and that $1k cheque. As prices fall, all those small traders are selling and when it goes up, they rush out to buy. I bet very few of them even look at the fundamentals of the companies they are buying shares in.

RRGB debt to equity ratio has increased from 35.7% to 157.8% over the past 5 years and fair value is just $5 if that. It's another struggling negative equity company trying to borrow its way out of trouble, but at the moment it can not even meet the interest payments on its debts. The market is buying it for the same reasons you did - for a quick in-and-out profit. Half of them must lose.

The coming crash could make the 2008 affair look like the warm-up act. US unemployment hit 14.7% and the US lost $15.7 trillion of GDP - so far! We still have Brexit coming down the tracks - the rest of the world does not care much about that, but then there's the US/China trade war, Herz and JC Penny folded and loads of other companies much smaller like Victoria's Secret are folding.

If someone could point out some positive economic indicators I would be grateful, because I for one cannot find any!
The Red Bladder
Frequent Poster (Level2)
Posts: 2592
Joined: Tue Jun 05, 2007 12:00 am
Location: . . .
 

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

Postby ManFromGlass » Mon Jun 22, 2020 4:03 pm

excuse my inexperience and general lack of savvy, but in general when it hits the fan don’t people need their entertainment even more than normal? And as some have the good sense to stay home wouldn’t that be streamed entertainment? So are content creators and content providers doing well during these times? Assuming idiots aren’t at the helm.
User avatar
ManFromGlass
Frequent Poster (Level2)
Posts: 3451
Joined: Sun Jul 24, 2011 12:00 am
Location: In Canada, eh?

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

Postby blinddrew » Mon Jun 22, 2020 4:18 pm

ManFromGlass wrote:excuse my inexperience and general lack of savvy, but in general when it hits the fan don’t people need their entertainment even more than normal? And as some have the good sense to stay home wouldn’t that be streamed entertainment? So are content creators and content providers doing well during these times? Assuming idiots aren’t at the helm.
One word: Repeats.
If people have nowhere else to go they'll stay in and watch* whatever is showing. Why commission new work when you can just keep churning out repeats and play to people's nostalgia?

* Until they can't afford their subscriptions.
User avatar
blinddrew
Jedi Poster
Posts: 11637
Joined: Sun Jul 05, 2015 12:00 am
Location: York
Ignore the post count, I have no idea what I'm doing...

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

Postby The Red Bladder » Tue Jun 23, 2020 9:50 am

ManFromGlass wrote: So are content creators and content providers doing well during these times? Assuming idiots aren’t at the helm.
In my humble opinion, idiots are at the helm in the UK and the US. Captain Bonkers is unleashing a torrent of government money only to see it go into spiraling stock prices instead of into the real economy. Here, Billy Bunter is at the back of the school bus facing the rear and looking for the steering wheel, whilst the bus is being driven by dopey Dominic testing his eyesight.

Content creators (that's us folks!) are in lockdown and cannot make movies or TV programmes and film and TV and music really are contact sports! Gaming is doing OK but that only goes so far and not everyone wants to sit with an iPhone stuck on their heads for a hour or two.
The Red Bladder
Frequent Poster (Level2)
Posts: 2592
Joined: Tue Jun 05, 2007 12:00 am
Location: . . .
 

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

Postby Pete Kaine » Thu Jun 25, 2020 11:20 am

The Red Bladder wrote:The market is crazy. It's on steroids, pumped up by all that crazy money and idiots cashing in the 401Ks and that $1k cheque. As prices fall, all those small traders are selling and when it goes up, they rush out to buy. I bet very few of them even look at the fundamentals of the companies they are buying shares in.

"The market is crazy"

Unbelievably so.

Just from my perspective of late my portfolio is mostly tech stocks (who'd have thought...) and it wiped out 18 months of gains in the first 4 weeks before the UK lockdown started, hardly surprising given they are largely Asian firms based in the regions that shut down first.

The interesting thing, with the rest of the world then moving to work from home, my holdings all bounced hard as the factories looked to reopen. I just held this time and bought a few times as it bottomed out and it's now back to about 10 points above where I was back in March.

Once again proving that it's little more than perception and speculation, rather than reality.

Prices dropped due to anticipated period of company inactivity.
Prices then gained again due to anticipated perceived increase in demand.

What changed? Largely nothing. Sure existing stockpiles were depleated, but new stock still wasn't being produced or sold. We've still lost at least 6 weeks or more of production (globally speaking, I'm not talking UK timeframe), so the speculation is largely upon companies being able to ramp up production above and beyond where they were before in attempt to meet the demand everyone thinks is still there...

I mean, the demand might still be there, or it might plummet when workers return to work... the interesting thing will be if they don't return to work, rather remote working becoming the new normal.

So, having lost 2 months of trading, even with increased demand are these companies going to make up 2 months worth of lost profits? Is that even possible with a supply chain that's been decimated for the last quarter?

I'd have been amazed at them trading on even after three months, but no, everything is up... bonkers.

Whilst I suspect some are just topping up on stock from firms they already trade and know, as TRB notes I also suspect there is a lot of knife chasing and speculation going on too and it's going to keep things interesting for a while although people were saying we were were in a bull market for too long at the start of the year and the bubble was long overdue for a burst, right now I really don't know what to think.
User avatar
Pete Kaine
Frequent Poster (Level2)
Posts: 3185
Joined: Thu Jul 10, 2003 12:00 am
Location: Manchester
Kit to fuel your G.A.S - https://www.scan.co.uk/shop/pro-audio

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

Postby James Perrett » Thu Jun 25, 2020 2:20 pm

Pete Kaine wrote:...although people were saying we were were in a bull market for too long at the start of the year and the bubble was long overdue for a burst, right now I really don't know what to think.

People have been saying exactly the same thing for at least the last 4 years. Trying to time the market is a mugs game. There's a saying I've seen that goes something like "Time in the market is better than timing the market".
User avatar
James Perrett
Moderator
Posts: 9795
Joined: Mon Sep 10, 2001 12:00 am
Location: The wilds of Hampshire
JRP Music - Audio Mastering and Restoration. JRP Music Facebook Page

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

Postby Eddy Deegan » Thu Jun 25, 2020 2:32 pm

James Perrett wrote: There's a saying I've seen that goes something like "Time in the market is better than timing the market".

I saw one that goes something like "the best way to get a small fortune out of the stock market is to invest a large one". One's mileage may vary!
User avatar
Eddy Deegan
Moderator
Posts: 4896
Joined: Wed Sep 01, 2004 12:00 am
Location: Brighton & Hove, UK
Some of my works
The 2nd SOS Forum Album project
 

PreviousNext