New Potential Homerun Stock: AVMC
Here is a stock that is flying way below the radar, with no recent following on SI, IHUB, or Yahoo. Yet, they are doing some pretty interesting things, and after having posted pretty large losses during their R&D and early launch phases, are now showing strong increases in revenues, and some major decreases in expenses.
While I wouldn't necessarily expect aVinci to be profitable in the next six months, a LOT is unfolding during that time which makes this currently a very interesting STORY stock. All of their new initiatives could lead to strong relative revenue increases. I am including them on this site because they seem to have some real potential to put up some strong fundamental numbers and to become profitable over the next couple of years, and they appear to be a solid, legit company that deserves much more attention than they are currently getting. And, they are dirt cheap.
1. aVinci, AVMC, .025 - .03, 52 million shares out That's a market cap of only about $1.5 million, folks! Potential dilution is another 23.7 million shares according to the latest 10q.
2. Main product/technology aVinci develops easy-to-use multi-media authoring solutions which allow customers to use photo images to create photo archive, photo book, poster, DVD archive and other products to enjoy at home or share on social networks and mobile platforms. aVinci products are available online and in more than 10,500 storefronts through retailers and partners such as Walmart, Walgreens, Meijer, HP, and Fujicolor. They aren't just another product on shelves--they are on thousands of in-store kiosks. They have 8 FT employees, and 6 PT ees.
Regarding competition: 10K:
Quality product, easy consumer experience.. "We believe our patent-pending production technology which automates the creation of multiple photo products utilizing the same images without further customer input, along with our proprietary storyboards incorporating licensed content such as popular music and animation and professional transitions gives us an advantage over our competitors....Common to software tools are their lack of automation. The user spends a vast amount of time mastering software to produce the same sort of automated results that can otherwise be accomplished very quickly with our products. "
3. 10Q link sec.gov
10K link sec.gov
website visit www.avincimedia.com
4. Debt As of 6/30 they are showing approx. $1.8 million, which includes $946k of deferred revenue. The primary items are an accrued liability of $363k and a note payable of $302k. The note payable has a conversion feature allowing the holder to convert to preferred shares at $1, which in turn can be converted to common stock at .06. This is not a death spiral convertible because the conversion price is fixed. For an OTC company, the debt picture is not too bad.
5. Other financial info of interest The company had cash of over $500k as of 6/30. This includes deferred revenue, so as work is performed over the coming months this cash will drop. They have significantly improved revenues and decreased operating expenses in the last year. In the first 6 months of 2009 revenues increased from 360k to 969k. Removing revenue related to work not yet performed of $247k, this is still a nearly 100% increase. Revenues are projected to double in 2010 over 2009 and operating expenses are projected to be cut nearly in half.
6. Why credible? Their products are real, as anyone can easily verify by going to their local Walgreens.
7. Why the stock may be a "homerun" I like aVinci for a lot of reasons.
* High credibility--meaningful partnerships with Walmart, Walgreens, Meijer, HP, ESPN, Fujicolor, and Circle Graphics
LOTS COMING UP:
* A major deployment in Walmart stores begins in September, 2010 for in-store fulfillment (ready in minutes) of their Archive DVD products, via kiosks. They have been paid to deploy to over 3000 stores, which provides over $1 million in revenue per year of their multi-year contract. This has good margin potential, esp in the second year.
*An expanded relationship with Circle Graphics -- the world's largest producer of large-format digital graphics just announced. Originally released for its ESPN branded line, aVinci intends to add poster designs for special occasions like birthdays, anniversaries, sports highlights, weddings, reunions and many more occasions over the next few months.
*Their new 'social media' product has large potential, as it enables groups of all kinds to brand a product or experience via photographs shares through social media to create a customized personalized poster. Internally called "Punkmypic," it has demonstrated the ability to engage event audiences in a "branded experience" by allowing attendees to capture images and video to be uploaded via email to a predetermined location where the image is combined with a corporate branded message. The new integrated media output is then emailed or text back to the consumer on his or her mobile device where it can be shared with friends and family via mobile and social networks or purchased as a traditional image based product such as a poster, trading card, photo book, DVD, or other personal photo product. Their partnership with ESPN's Consumer Product division to make this available for the X Games was one of the first collaborations, and thousands participated.
* Their strongest quarter is coming up: Christmas season accounts for 30-40% of their annual revenues.
* Their current price and recent volume appears to reflect ignorance of what is going on, as their market cap is only about $1.5 million.
8. Any other issues of possible interest
A recent shareholder update PR details many of the upcoming initiatives: biz.yahoo.com
Management owns 70% of the shares, the float is low.
Management includes 3 brothers. Management has strong backgrounds.
These guys know how to get things done. 10K: "We intend to continue to try to differentiate ourselves from competitors by offering a higher quality product which has enabled us to land and keep mass retail customers in the face of new product offerings by competitors. We also intend to continue to differentiate ourselves through our brand name partnering strategy with entities such as ESPN."
I have some concern about the costs of all of the things coming up, but they are all strong initiatives they could pay back handsomely. Overall I see this as definitely worth watching, and worth considering for purchase now as a speculative investment. |
