lundi 30 juin 2014

Avigilon (AVO.TO): An exception of investment

Avigilon is one of the companies in Canada that offers the highest growth. In fact, the compound annual growth rate since 2008 is over 100%! In the last years, the CAGR is about 75% which is still great.

The company produces security equipments (HD video surveillance, door readers, security control software, etc).

Their HD cameras are way better than competition from what is seen on the website of the company. I know, my brothers, a website could say anything to sell crap. But the exceptional growth in sales must mean something about the quality of the products. 

Recently, Canon has acquired a company named Milestone that produces security systems. By doing so, Canon wants to become a leader of security equipment. So, there's competition in sight. But, there's already competition for Avigilon because Milestone exists since 1998, so we'll see in a couple of years if this support of Milestone by a giant (Canon) will become a real threat. I bet that a couple of years of strong growth are still ahead.

The security market should go from 12.6 billion dollars in 2012 to 23.2 billion dollars in 2016. So, there's a lot of room for growth. Security systems have their place everywhere: stadiums, hospitals, airports, banks, offices, shopping mall, casinos, school campus, transportation (subway, bus), etc.

In 2013, the revenue of Avigilon was 178 million dollars. They plan to reach 500 millions of revenue in 2016 (180% of growth). So, they think that a strong growth will continue for at least the next couple of years. A couple of sentences before, I wrote the same thing. It looks like i'm already brainwashed by the marketing of the company.

Three important managers left the company in the recent months. The last departure caused a major drop in the share price (which is still expensive by PE ratio). That drop caused a lot of insider buying around 20$ (recent price is around 22,50$). In may, at least 5 executives of the company bought AVO shares for a minimum 50 000$. Insiders usually don't lose money, so it's a good sign to buy if you ask me.

And what thinks Jason Donville of that company (once again via Stockchase)?

2014-06-19 (BUY): Dipped down pretty low 3 or 4 weeks ago, and is sorry that he didn’t pick it up at that time. Has liked this company, other than it's valuation, for some time. If it comes back 5%-7%, he will be a buyer.

2013-08-22 (DON'T BUY): Outstanding technology but he thinks on valuation that the stock is rich. He questions if they can sustain the growth rate that they have had and this is why the stock is starting to flatten out.

2013-01-08: (DON'T BUY): When a company is growing like this one, they have to finance and one of the ways is by raising more equity. Growing pains of a great growth company. However, this company does not have a lot of recurring revenue so he has taken a pass on this. Thinks it is getting expensive, but so far he has been wrong.

Some important statistics:

Highest PE ratio last 5 years: 58
Lowest PE ratio last 5 years: 32,5
Actual PE ratio: 35,6
Dividend: none

Sales growth rate last 5 years: 102%
Sales growth between most recent quarter and equivalent quarter one year ago: 74%

PE/Growth ratio: 0,48 (under 1 is considered attractive)

Average ROE last 5 years: 17,2
Actual ROE: 21,4

Donville/Greenblatt ratio (ROE/forward PE ratio): 1 

Disclosure: I've bought some shares on june 27th. With the actual evaluation, I can't build a massive position. But I'd be comfortable with something like 3 or 4% of my portfolio. The recent massive insider buying gives me confidence that it's a good time to buy. Let's see if i'm just being manipulated.

dimanche 29 juin 2014

Top picks from 2009 to today (Part II: 2011)

This time, let's examine all the Top Picks of Donville in 2011. Let's see if he gets better with time or if he turns to vinegar.

Once again, every Top Pick for which the price has rised from 100% at least gets a rating of "good". Every Top Pick for which the price has rised between 0 and 100% gets a rating of "average". And finally, every Top Pick for which the price has declined gets a rating of "bad".

Precision: Some companies could go private or be bought a little after Jason made his picks. I don't consider anything else than the price at the time when the Top Pick was made and the last price recorded for the shares. Only the result in appreciation is considered. This precision is made for two top picks of 2011: Distinction Group and Neo Materials.

January 20, 2011:

CGI Group: UP 105% (GOOD)
Glentel: DOWN 21% (BAD)
Chesswood Group: UP 105% (GOOD)

April 26, 2011

Distinction Group ( UP 36% (AVERAGE)
Canyon Services Group: UP 35% (AVERAGE)
Boyd Group Income Fund: UP 367% (GOOD AS FUCK)

May 25, 2011

CGI Group: UP 79% (AVERAGE)
Carfinco: UP 32% (AVERAGE)
Home Capital Group: UP 67% (AVERAGE)

July 11, 2011

CGI Group: UP 68% (AVERAGE)
Canyon Services Group: UP 35% (AVERAGE)
Boyd Group Income Fund: UP 232% (GOOD)

August 17, 2011

Paladin Labs: UP 268% (GOOD)
Neo Material Technologies: UP 5% (AVERAGE)
Carfinco: UP 38% (AVERAGE)

September 8, 2011

Total Energy Services: UP 73% (AVERAGE)
Neo Material Technologies: UP 14% (AVERAGE)
CGI Group: UP 108% (GOOD)

October 17, 2011

CGI Group: UP 92% (AVERAGE)
Carfinco: UP 41% (AVERAGE)
Constellation Software: UP 268% (GOOD)

December 12, 2011

Paladin Labs: UP 260% (GOOD)
Home Capital Group: UP 90% (AVERAGE)
Constellation Software: UP 236% (GOOD)

A few stats about those 8 appearances on the TV:

0/8, Donville has had 3 good top picks
1/8, Donville has had 1 bad top pick
2/8, Donville has had 2 or 3 good top picks
7/8, Donville has had at least one good top pick

If we attribute a note of 10/10 for each good top pick, a note of 5/10 for each average top pick and a note of 0/10 for each bad top pick, Donville would get the global score of 160/24 which is equivalent to 6,7/10. Last time, with a global score of 6,9/10, Donville got "average plus", this time he'd get the same rating.

mardi 24 juin 2014

Concordia Healthcare: Fuck my genetics

What the humanity owes to Jason Donville is the discovery of Paladin Labs and Constellation Software. Two huge home runs of the last few years on the TSX. I've had them both and I've made a lot of money because of Jason, my financial hero.

Of course, he's had some strange recommandations too. And because I follow his advice like if he was the Christ of investing, I lost some money because of him too. But none of his recommandations resulted in a total failure.

So, keeping in mind that he made us aware of Paladin and Constellation, each new discovery made by him is susceptible to be another great one.

At the last appearance of Jason Donville on BNN, I've seen that the biggest position (13%) of his fund is now Concordia Healthcare. It was quite a surprise for me, because, from what I knew, his biggest position was Constellation Software in January. And he never spoke of Concordia Healthcare before. How could such a big position appear out of the blue?

And what about Concordia Healthcare?

First thing I always do is to check the ROE on Reuters. The ROE is -111 which is awful.

Second thing I do is to check the performance of the share:

52 week low: 0,96$
52 week high: 35,65$
Actual price: 31-32$

Phew, that's what we call performance.

Third thing I do is to check everything on the balance sheet (debt, revenues, growth in EPS, etc). And then, I see...

I see absolutely nothing interesting. Well, let's precise that the track record is very short, so it's actually hard to see anything under these circumstances.

And then, I think about Sequoia Fund and the big position they took in Valeant a few years ago.
At the time, I didn't understand what was so attractive with this highly leveraged company (a lot of debt). Still today, even if I have a large position in Valeant, it doesn't respect my usual criteria of selection. All I see is a desire to eat everything, especially elephants and hippopotamus. And even blue whales. 

So, from the little that I understand at this moment, it seems that Concordia Healthcare follows the same pattern as Valeant (a lot of acquisition that results in a lot of debts).

All I can do is to think that some superior intelligence has seen something before me that I'm unable to see at the moment.

I feel like a fucking homo erectus who can't follow homo sapiens Donville even if I live at the same fucking era. I feel retard. Fuck me. Fuck my genetics.

lundi 23 juin 2014

Top picks from 2009 to today (Part I: 2009-2010)

This blog is pretty recent and I'm already doing an investigation like if i'm fucking payed to do this. But no, my brothers, i'm not payed at all. I only do this for science and for love of the human race. Use the fruit of my research to get wealthier and die rich. That's all I'm seeking. To make you some old fucking rich people who spend their retirement days in Florida with their orange fluo skin.

Via, here are the top picks of Jason Donville from October 2009 to December 2010. Besides each choice, you'll see the rise or drop in the price of shares since Jason chose it as a Top Pick.

Every share that has doubled or more since then is a good choice. Each return in share price which is between 0 and 100% is an average choice and each choice where the price has declined is a bad choice. The dividends were not included in that study so it's a bit incomplete. But as an approximative study, it's not bad. Anyway, I'm not giving that to an University to get a PhD so give me a bad rating if you want. I don't give a fuck. I already have my degrees so any shitty analysis would have no consequences on my education path which is well behind me.

Let's see if Donville kicks ass. Don't forget that he's not compared with anyone so if the results are so-so, probably a lot of mofos who call themselves investors or analysts would get worse results.

And don't forget that the companies that he ranks as "strong buy" or "buy" aren't considered. I've retained only the "Top picks". Otherwise, it would have been a fucking huge job for me to compile everything. You know, I've got a life, even if I'm a blogger.


October 16th 2009:

Home Capital Group: UP 158% (GOOD)
First National: UP 39% (AVERAGE)
Canadian Western Bank: UP 78% (AVERAGE)

December 3 2009:

Carfinco: UP 336% (GOOD)
Pethealth: DOWN 11% (BAD)
Royal Bank: UP 30% (AVERAGE)

January 22 2010:

Genworth: UP 49% (AVERAGE)
Home Capital Group: UP 145% (GOOD)
Manulife Financial: UP 8% (AVERAGE)

February 24 2010:

Constellation Software: UP 525% (GOOD AS FUCK)
Total Energy Services: UP 149% (GOOD)
MTY Food Group: UP 218% (GOOD)

March 23 2010:

Paladin Labs: UP 511% (GOOD AS FUCK)
Imperial Metals: UP 94% (AVERAGE)
Altus Group: UP 84% (AVERAGE)

May 14 2010:

Logibec Groupe informatique: UP 16% (AVERAGE)
Directcash Payments: DOWN 9% (BAD)
Constellation Software: UP 490% (GOOD AS FUCK)

June 29 2010:

Paladin Labs: UP 511% (GOOD AS FUCK)
Home Capital Group: UP 128% (GOOD)
Critical Control Solutions: DOWN 24% (BAD)

August 6th 2010:

Paladin Labs: UP 421% (GOOD AS FUCK)
Carfinco: UP 83% (AVERAGE)
Critical Control Solutions: DOWN 39% (BAD)

August 30 2010:

Constellation Software: UP 501% (GOOD AS FUCK)
Home Capital Group: UP 122% (GOOD)
Directcash Payments DOWN 19% (BAD)

October 4 2010:

Canadian Energy, Services and Technology: UP 458% (GOOD AS FUCK)
MTY Food Group: UP 136% (GOOD)
Altus Group: UP 64% (AVERAGE)

December 6 2010:

Glentel: DOWN 7% (BAD)
Canyon Services Group: UP 60% (AVERAGE)
MTY Food Group: UP 120% (GOOD)

A few stats about those 11 appearances on the TV:

0/11, Donville has had 2 or 3 bad top picks
1/11, Donville has had 3 good top picks
4/11, Donville has had 2 or 3 good top picks
6/11, Donville has had 1 bad top pick
11/11, Donville has had at least one good top pick

If we attribute a note of 10/10 for each good top pick, a note of 5/10 for each average top pick and a note of 0/10 for each bad top pick, Donville would get the global score of 215/33 which is equivalent to 6,5/10. So, his top picks are usually between average and good. Something like "average plus".

It's not perfect, but some of his choices were so good that they could absorb any mistake and make a great global result.

We'll discuss more about that soon.

dimanche 22 juin 2014

Donville is the shit. My portfolio says so.

If you're from outside Quebec, you probably couldn't read the first post from this blog. Too bad for you my friend. But it was just a presentation. Now, here's the real beginning of the story.

Jason Donville is the shit. He made me wealthier and aware of some great companies that I'd never heard of.  For at least a year, I've been pretty excited about all of his appearances at BNN. I always watch him via the website and follow a couple of hours later the website to read what he just said (because that site gathers a lot of information about all the analysts in Canada that made a TV appearance).

So, to understand how Jason Donville has influenced me, here's my actual portfolio. You'll recognize a lot of Donville's suggestions. From what I know, more than 50% of my actual portfolio includes some of his suggestions.

Canadian Shit
Rifco: 12,7%
Constellation Software: 9,8%
Cipher Pharma: 8,9%
Valeant: 7,5%
CGI: 7,2%
Carfinco: 5,8%
Alimentation Couche-Tard: 5%
Loyalist Group: 3,1%
Macro Enterprises: 2%
NTG Clarity Network: 1,9%

American shit
Questcor Pharma: 7,1%
Portfolio Recovery and Associates: 6%
Dollar Tree: 3,3%
Ross Stores: 2,1%

CASH: 17,6%

Why don't fuck with Donville

Je suis un gars de la région de Québec. Je suis investisseur depuis environ 6 ans. J'ai d'ailleurs fait mes premiers pas en pleine crise, à l'automne 2008, à l'époque où l'apocalypse était à nos portes selon plusieurs analystes financiers.

J'ai commencé en suivant les conseils d'un collègue de travail investisseur. Avec le recul, je réalise que ses conseils étaient relativement peu avisés à certains égards. Puis, j'ai lu le livre de Stephen Jarislowski. Puis, j'ai lu d'autres trucs, sur Internet et à la bibliothèque. Puis, j'ai appris l'existence de Jason Donville et j'ai réalisé que ses conseils étaient parmi les meilleurs du milieu financier canadien. Peut-être étaient-ce même les meilleurs .

Aujourd'hui, une majorité de mes investissements ont été faits en tenant compte des suggestions de Jason Donville. Je dois donc une bonne partie de mon succès financier à ce type de Toronto.

Ce blog visera à traiter des meilleurs choix d'investissement selon Jason Donville (et parfois, selon moi). Je compte également revenir sur sa méthode d'investissement en soulignant autant ses nombreux bons coups que ses quelques mauvais coups.

La majorité, sinon la totalité de ce qui sera écrit sur ce blog le sera en anglais. Je ne suis pas parfaitement bilingue, mais j'ai bien l'intention d'utiliser un langage imagé afin d'accrocher l'attention de tous ceux qui passeront ici.