Someone I work with told me yesterday about a company that designs and manufactures video surveillance equipment and software called Avigilon (TSX:AVO)
He said he knows a person who knows another person who has worked directly with AVO and thinks the stock is very undervalued right now. The company is expected to announce their quarterly financial results very soon. My co-worker believes AVO’s numbers will beat the street’s expectations and the stock will make a nice jump
Of course I’m a pragmatic investor who conducts careful and thorough research before buying any stock, so after my co-worker told me about it I decided to purchased 50 shares of AVO this morning at $25.64/share I just can’t pass up the opportunity to make a quick profit if he’s right and AVO does go up! The total purchase cost was $1,282. I had $1,000 of savings lying around so I used that, and borrowed the remaining balance on margin.
Initial Investment: $1,000.
Leveraged up to $1,282 ($25.64 x 50 shares)
The company doesn’t pay a dividend but it is growing fast. AVO’s revenues are currently increasing at a rate of 60% a year. It has a pretty high P/E ratio of 39 x but it’s well justified given the company’s growth rate. Short term technical indicators are also promising which is favorable to a swing trade.
I’m hoping to make at least $200 in profit on this trade which would be a nice 20% return.
Here are the reasons I think AVO is a good buy right now for me.
- My co-worker is bullish on this stock
- My very smart online friend, Phil from Ontario, likes this stock
- Bullish momentum, MACD, and other technical events
- Based in Vancouver, because I like to invest in local companies
- The consensus from stock analysts is a strong buy.
Will I make some easy money out of this or will AVO disappoint and eventually lose its competitive edge like BlackBerry? Who knows. Acting on a stock tip is pure speculation (lots of risk) but life is short so let’s make it interesting
Random Useless Fact:
This bathtub is cut from a single slab of quartz and costs $1 million. The block of the purest white rock crystal was discovered and quarried in Brazil.