Replies to post #32373 on Savvy Trades and Investments

[Mermelstein]

AVNW - EBITDA was nearly $5m last quarter (2nd quarter). They already guided for positive EBITDA in both the 3rd and 4th quarters, with the 4th quarter being the strongest of the year. So say $1-2m in EBITDA in q3 and $6-7m in q4. So on an annualized basis, that's nearly $15m of EBITDA, and there's reason to assume contracts are going to increase in the coming years as critical infrastructure projects get more funding.

Company is only trading for a $55m EV, and they continue to generate cash. So the stock is trading for less than 4x forward EV/EBITDA and less than 20% of sales.

There's no "devil's advocate" here. This is one of the best values in the market right now. Not sure I've ever seen an easier layup. No excuses for not owning this.

[wadegarret]

Nelson- AVNW

I don't feel using GAAP is correct way to value the stock. Thing is, on a non gaap basis, the company posted $.42 for the Sept qtr. after taking out $1M in one time items. The Dec qtr should be breakeven at worst, and then they said the Mar qtr should be better than the Dec qtr. Therefore I would expect that between the Sept, Dec, & Mar qtrs, to total around $1 in non gaap EPS. Then the June qtr will likely be around $.50 non gaap IMO. Overall I speculate 1.50 in non gaap EPS going forward from Sept 16 to Sept 17 vs a $15.50 stock price. Very cheap IMO with the kind of turnaround & growth potential- and don't forget the strong balance sheet. I think they could sell for a 15-20 PE going forward yet, so 50%-100% potential upside- my view.

[hweb2]

I still like AVNW here. Altho liked it more around $14. If nothing else, stocks that keep hitting new 52-week highs in this market just keep drifting higher. So a low floater like AVNW could trend up towards $20 if the market stays hot.

I love the balance sheet on this one with $7/share in cash. Big turnaround in Q2. But upcoming Q3 is seasonally weak. Earnings could be just above breakeven. Q4 should be another big quarter, but a long wait for those numbers.

I don't think AVNW is quite the slam dunk that Mermelstein does, but I do think it's undervalued. Maybe because there's just not many cheap stocks in this expensive market. Or maybe because every day I'm reading one lousy earnings report after another. Not much out there to get excited about. At least AVNW should post some impressive bottom line improvements for the next 3 quarters.