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  • AVG Belongs Both In Your Computer And Your Portfolio [View article]
    fyi. looks like okumus re-upp'd their stake in AVG. They previously had 5.5M shares (in 2q13) but dumped 4.5M shares during 3q13. Their recent 13-g filings shows that they purchased around 3.1M shares around November 15.

    http://1.usa.gov/1b8kNYi
    Dec 2 05:16 AM | Likes Like |Link to Comment
  • AVG Belongs Both In Your Computer And Your Portfolio [View article]
    The product is fine. Just a lot of shorts flaming the product.
    Nov 18 02:06 AM | Likes Like |Link to Comment
  • AVG Belongs Both In Your Computer And Your Portfolio [View article]
    agreed. the valuation is still stupid cheap. sell off was over done. I have not added but did not sell either.
    Nov 13 02:14 PM | Likes Like |Link to Comment
  • AVG Belongs Both In Your Computer And Your Portfolio [View article]
    cool. I'm holding as well. I bought when it was $13-15/sh earlier this year. My concern is this setback will allow the short interest to creep back up and turn this into another dog fight. I do like their continued foray into mobile.

    Any thoughts on why they have such a limited asia presence? I had always thought of AVG merging with NQ as a potential combination. Lots of synergies and minimal overlap.
    Nov 8 06:08 PM | Likes Like |Link to Comment
  • AVG Belongs Both In Your Computer And Your Portfolio [View article]
    so where do you stand on avg now?
    Nov 8 06:01 PM | Likes Like |Link to Comment
  • AVG: Stale Short Thesis = Great Opportunity! [View article]
    @Bhttsl

    The beta is not really relevant right now. Not enough historical data to make it reliable.
    Jul 1 02:16 PM | Likes Like |Link to Comment
  • AVG: Stale Short Thesis = Great Opportunity! [View article]
    10x is a low multiple for PE and very conservative. How many years are you projecting? I think the issue I have is the use of a low discount rate for the interim cash flows. While the company may very well turn into a steady subscription based business (ie SYMC, Trend Micro), there is a fair amount of execution risk Today to get to that Future state. Low discount rate + growth phase = outsized valuation driven from projection period. Have you tried using a 2 or even 3 step model?

    Also, the risk free rate is at an unprecedented low right now. I doubt rates will be this low in 5 yrs. The 10% discount rate is low given how rates will likely rise in the future. For a mid cap company like AVG, I wouldnt be surprised to see a discount rate in the mid teens.

    Even with the discount rate tweaks, that probably wont change the undervalued story. Is it undervalued by a factor of 100%? tough to say. I think it would be worthwhile to compare AVG against its comps to see how they trade on a multiples basis. I prefer a DCF valuation, but as a stand alone metric, its hard to gauge what value should be when the market may not agree with your projections. A comps analysis would be helpful. The problem is, AVG has few true comps.

    What were you looking at in terms of comps? The obvious ones are SYMC and Trend. But they are a bit too big as true comps. There are other SAAS and security providers, which might be an option but then you have different sectors and likely different margins.
    Jun 30 09:12 PM | Likes Like |Link to Comment
  • AVG: Stale Short Thesis = Great Opportunity! [View article]
    Nice write up. I'm long as well and got into AVG for similar reasons. The short thesis is a bust as far as I'm concerned. What I'm excited about is their expansion into mobile security and ability to monetize that sector. Plus the 7.9m shares short reflects 43% of the float. With average trading volume of 300k/day, you're looking at a short ratio of 26 days. Thats a whole month of buying on average volume for shorts to cover.

    Regarding your DCF, I personally have not run one for AVG, but had some thoughts on your inputs.

    For your DCF, how much of the value is weighted in the terminal value? Also, what comps are you looking at for terminal value? Looking at SYMC and TMICY, their LTM EV/EBITDA multiples are around 7-8x. 10x seems a bit high given the terminal multiple is supposed to reflect maturity. Have you looked at what the implied perpetuity growth rate would look like if you were to back into that assuming your 10x terminal value?

    For your discount rate, how did you come up with 10%? Seems kind of low for a mid cap company. The 10% might be ok for a larger and mature company, but I think AVG is still growing at too fast a clip to warrant 10%. You may want to consider 2 different discount rates for AVG. One for projected cash flows and a step down for terminal value.

    Have you looked at valuations on a multiples basis? AVG does trade on a premium relative to its larger peers, but not a large enough premium to account for faster growth. So I think there is upside, but I'm not sure if that delta can be easily captured in just a DCF.
    Jun 30 06:16 PM | Likes Like |Link to Comment
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