I am looking at AVA with interest. Only bought a few on Tuesday @0.155, for me holding a small parcel helps me research deep and find positives and negatives before taking bigger position. I usually invest with 1 or 2 years time frame in mind.
What attracted me to AVA is
1. Present Market Cap vs size of Indian deal and Revenue vs Market Cap (1x at present)
2. Technology division is at final stage of negotiations with a major overseas customer for a significant (5 year) long term order to deliver large-scale fixed monthly quantities of locking products. Management consider this as game changer.
3. Management keep buying although in small amount at a time but at a higher price than market is presently offering me. I think they are not done yet.
4. Even if there is CR, it can't be below the price management recently bought. Just IMO. So some margin of safety at present price.
5. Company's commitment for cost saving such as rearrange the board.
6. Continuous growth in revenue suggest, their technologies got Business MOAT.
Now regarding company's cash position,
@Sequoia made an excellent summary here after latest 4C
https://hotcopper.com.au/threads/an....4736473/page-3?post_id=38323078#.XN1iiRgRX1EPrediction for present quarter,:
Inflow = 10m
Outflow = 8.7m
Cash at bank on 30 June 2019 will be $0.9m + $1.9m = $2.8m
I am also aware that there is a difference of $1m forecasted revenue between prediction made on 26.03.19 and 30.04.19. so counting latest prediction AVA will have $1.8m in the bank on 30 June 19. If they can somehow manage Q1 fy20 at least cash flow neutral, from Q2 FY20 company will be profitable and cash position will increase significantly each quarter resulting significant re-rate in share price.Chairman and CEOs recent buying suggest they may be able to avoid CR and already significant steps has been taken to reduce cost such as re arrange the board resulting cost saving of $1.2m per year.
IMO and will be happy to be corrected, Present fear of CR is an excellent opportunity to buy and hold until January 2020 for a significant re-rate. I understood long term holders has suffered a lot but from now to December, it seems things are turning and time for enjoying the fruit of long hard work.
Above are just my opinion, I'll appreciate comments from long term holders and I am always happy to be corrected.
(20min delay)