(If you find the notes below difficult to follow, the video will help).
Market risk assessment:
- High, New Purchases 4% Of Cash Position.
- SPY currently trading at $415.80. Indicated BuyAt $375.60 (9.67% below current market), SellAt $428.88 (3.15% above current market).
- Calculation based on proximity of current price to the Algo-indicated BuyAt and SellAt prices of the S&P 500 and the fifty fastest-growing, low-debt, highly profitable companies trading on US exchanges.
- The Risk Research portfolio is currently 94% in cash. It is up about 5% this year, year to date.
- Click on images to expand.
SuperGrowth MultiBagger: AVNW – Aviat Networks Inc
Our selection for today, Aviat Networks, ranks 4 out of 61 on the list of high-momentum SuperGrowth MultiBaggers. Aviat Networks provides microwave transmission solutions for private networks and telecom providers. It appears to have huge potential.
Risk Research doesn’t do much in the area of product research or analysis. We’re experts in detecting important changes in financial statements; new trends indicative of significant potential. Almost all the work goes in comparing thousands of public company financial statements to each other. However, in the case of Aviat, we have noticed something important in the backstory: performance has improved significantly since the appointment of a new CEO in January 2020.
Mr. Peter Smith, age 54, has been our President and CEO since January 2020 and a member of the Board since February 2020. Mr. Smith has more than 25 years of leadership experience in business management and a proven track record of creating value for companies. He most recently served as Senior Vice President, US Windows and Canada for Jeld-Wen from March 2017 to December 2019, where he had full profit and loss responsibility for Jeld-Wen’s $1B+ windows business, implementing lean manufacturing principles and strategic development programs to deliver growth and improved profitability. Prior to Jeld-Wen, from October 2013 to March 2017, he served as President of Polypore International’s Transportation and Industrial segment and oversaw transformative initiatives that helped prepare the former public company for sale to the Asahi Kasei Group. Previously, he served as Chief Executive Officer and a director of Voltaix Inc., until its sale to Air Liquide. (Source, Avait Proxy Statement, September 2020)
Note the change in profitability and overall financial statement momentum since the arrival of the new CEO.
We also note that two representatives of Steel Partners Holdings, 12.4% owners, joined the Board in 2016 after taking the position in 2015.
Other financial statement trends that captured our interest from what we call the Summary Report:
Finally, the conclusion of our buy on weakness, sell on strength pattern recognition software. Based on the patterns it sees, it now indicates a BuyAt price of $29.99 (the $30.90 indicated below was as of yesterday’s close), 4% below the current market of $31.19. Because we follow so many companies, we can wait for unusual opportunity in exceptional companies. We’re liquid enough to take advantage when such an opportunity presents itself.
It is important to note that the Algo updates every few minutes throughout the day based in part on volatility. Higher volatility means and the bid drops, lower volatility and the Algo will pay more.
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