Oct 162014
 

14-10-avo-average-down-buy-more

What to do when the stock market goes on sale? A smart option would be to double up on some current positions. πŸ™‚Β A couple months ago I bought 50 shares ofΒ Avigilon Corp for $25 each. However due to the negative sentiments in the overall financial markets recently AVO’sΒ share price is down. But there’s no need to be alarmed because the company makes high definition security cameras and software. Now is the perfect opportunity for me to turn a current paper loss into a capital gain in the future! I noticed over the last week AVO has bounced around the $13 to $14 range but has never fallen below $13, which to me signals a strong support and a good time to average down. So earlier today I deposited $1,500 of savings into my brokerage account and picked up 100 more shares of AVO.TO. πŸ™‚

14-10-avo-average-down

Here is what average down does. When I bought AVO in August the average cost I paid for each share was $25.64. However the stock was recently down about 40% from my purchase price. πŸ™ So now I buy even more shares at a lower price. With the addition of 100 shares today I’ve essentially paid a total of $2,717 to own 150 shares. This drops my average purchase price down from $25.64 to just $18.11 per share. So now I only need the stock to rise back up above $18.11 (plus commission) to make a profit. Lowering the average cost bases (ACB) is a great way to lower risk as long as the company has a good chance to bounce back. Most analysts think the stock will be worth at least $25/share in one year from now. πŸ™‚

14-10-avo-average-down-price-target

AVO’s return on assets, return on equity, profit margin, and revenue growth are all at least twice as high as the industry average. Its forward P/E ratio is only 13 times, which is quite attractive for a company that’s growing its sales at over 50% a year. πŸ™‚ Unlike some other tech companies AVO is actually profitable so investors don’t have to wait to realize additional company value. The risk is if the rest of the stock market continues to fall then AVO will likely be dragged down with it. We’ll just have to see what happens.

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Random Useless Fact:
Pandas are the least racist animal because they’re white, and black, AND they’re Asian.

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TheMadInvestorHarryPhilDebtGirlWeekly Wrap-Up, October 18 | No More Waffles Recent comment authors
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AVO up more than 8% today. Great news for you πŸ˜€ . I am not watch this stock as it is a high tech stock, and not a dividend payer.
My advise would be stick with high quality stocks and collect dividends without worrying about market swings.

Best Regards,

Lynx
Guest

Nice move Liquid, it is always good to average down on positions when you are able especially when the long term prospects of a stock looks good. I have also been doing some buying in this market. πŸ˜€

AssetGrinder (@AssetGrinder)
Guest

Been watching AVO since u bought it. Pretty volatile but I like the idea of averaging down. You could always write some covered calls on top of the new price too

Theeighthdigit
Guest

I just fond your site from the comment you left on mine. I love it, I must have red 50 of your post today πŸ™‚ Keep up the good work.

For your AVO move, I’m an index ETF guy but averaging down is good if believe in the stock.

At 14,60$ a share, it has a PE ratio of 24.37. You can get VCN.TO for a PE of around 20. Do you have a reason to believe their earnings will increase a lot in the future ?

tawcan
Guest

Good job on averaging down. Looks like their latest quarterly results disappointed quite a bit, hence for the drop. Will keep an eye on this stock.

No More Waffles
Guest

Liquid,

Like your new header!

Great job averaging down on AVO! At how much of a drop do you consider averaging down a good idea? 10-20-30-40%? I’m wondering because I have some positions that are also down quite a lot since I’ve bought them.

Keep it up, pal,
NMW

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[…] from Freedom 35 showed that a plunging stock market is a good timeΒ to average down on your existing positions. By averaging down you effectively reduce the average price you paid for […]

DebtGirl
Guest

You are doing wonderfully as usual! How fun!!!! xoxox

Phil
Guest

Sorry for the late post… I did the same, and still believe in the companies mid to long-term. I think we have a bit more volatility to come as people react to next months statements and try and jockey for the next phase of the market (sideways for a I while I think…), so I too loaded up on a few “bargains” that presented themselves… Glad I bought my car in July with up stock money from the last 2 years πŸ™‚ Again the thing to learn here is the market always flows on waves… When the wave seems up, start paying debt, to free up LOC’s to catch the next trough… Cheers.

Harry
Guest
Harry

Its under $13 now!! what are you thinking buy more to dollar cost average or hold or sell?

TheMadInvestor
Guest
TheMadInvestor

AVO is now down to $9.48, are you buying more?