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Consensus community valuation
$0.330
Average Intrinsic Value
105.8%
Undervalued by
Active Member Straws
#Thesis
Last edited 2 months ago

•Strong management team surpassing expectations in a short time

•Management has 5.8% stake with significant increased insider buying recently

•Provide a number of different products, servicing multiple markets and customers in multiple countries

•Possess a strong moat/competitive advantage with their patented products and tech

•Strong balance sheet and fundamentals – gross margins of 19% (services division) and 79% (tech divisions), trading at 1.1x annual revenue and 2.6x gross profit with an EV of $34,858,000.

•Zero debt

•Profitable

•High-quality B2B customers - recent contracts with Australian DoD and Indian Ministry of Defence and other current customers including NATO, US Dept of Homeland Security, Lockheed Martin

•Strong tailwinds with cyber terrorism on the rise and the U.S. implementing strict cyber security measures, rolling out as early as next year, for anyone along the supply chain dealing with defense contracts

Having so quickly reached positive cash flow and profitability under new management, Ava Group appears to be hitting an inflection point. High growth potential and undervalued.

Disclaimer: I hold a small position in AVA

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#Company Overview
Added a month ago

https://arichlife.com.au/ava-risk-group-asx-ava-may-offer-asymmetric-opportunity/

A very good post about AVA by Steve McCarthy from DMX capital. A must read before investing in this company. 

 

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#Management
Added 2 months ago

Management

On March 11 2019 Ava Risk Group appointed Scott Basham as CEO. Not long before that they hired a new CEO for their services division (C Fergus), a new Non-Executive Director (M McGeever) and a new Chairman (D Cronin). In this short period of time new management has been quietly achieving as well as buying up shares.

Achievements:

Invested $19,000 on PPE in first quarter of 2020

Improved margins and grew cash from operating activities from negative $535,000 to positive $712,000; achieving their first 3-month period of positive cash flow.

Achieved net income $1,202,000 (Dec 19) up from previous half -$2,299,000

Services Division (Ava Global) $6.2M Q3 Revenue

                •client spend increased 26% to circa A$145m

                •gross margins averaged 19%

Technology Division (BQT Solutions and FFT) $6.1M Q3 Revenue
                •backlog exceeds $16m

                •gross margins averaged 79%

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#Company Overview
Added 2 months ago

About Ava Risk Group

The Ava Group is a market leader of risk management services and technologies, servicing industrial, military and government clients globally.

The Group features a range of complementary solutions including intrusion detection and location for perimeters, pipelines and data networks, biometrics, card access control and locking as well as secure international logistics, storage of high value assets and risk consultancy services.

Ava group is made up of 3 divisions:

Services division consisting of Ava Global

Technology divisions consisting of BQT solutions and Future Fibre Technologies (FFT)

Future Fibre Technologies

FFT has developed a portfolio of products designed for intrusion detection and location. FFT delivers enhanced signal processing and event discrimination, while offering strong integration capabilities. 

What they offer is fibre optic cables that can be:

Strung along any type of fence to detect and pinpoint the location of disturbances including cutting, climbing, and lifting.

Buried underground above any critical infrastructure (think pipelines or internet cables) allowing real-time detection of any drilling, digging etc preventing damage. FFT Covert buried solution can detect even the smallest vibration for example walking, crawling, digging or vehicle movement.

Used in data network infrastructure protection as cyber security. “Dark cables” are applied within network cables to detect and locate disturbances, intrusion attempts, tampering, and data tapping activities to within 5 metres along data networks and can be applied anywhere from local data centre LANs to long-distance WAN transport. Detection can extend anywhere in parallel to the sensitive cable to include cable trays, conduit, pathways and cable distribution systems. The system can monitor copper, fibre and even physical adjuncts such as racks and trays for similar disturbances.

FFT’s Data Network Infrastructure Protection solutions can work stand along or in conjunction with customer’s existing Network Management System.

With numerous international patents, FFT’s technology is unique and proven.

Their cables have a lifespan of 20 years, require little to no maintenance, require no power, and are not susceptible to electromagnetic interference.

Incorporates Artificial Intelligence (Ai) Analysis – maximising discrimination between intrusions and environmental nuisance sources including wind, rain, traffic, machinery and aircraft.

Future Fibre Technologies products are deployed by some of the most security conscious sectors in the world including, military, oil and gas, extractives and energy, transportation, and utilities.

Clients using FFT for their critical infrastructure protection:

Australian DoD, NATO, Exxon Mobil, Dow Chemicals, Kennedy Space Center, Lockheed Martin, US Marine Corps, Woodside Petroleum, US Air Force, US Army, US Border Patrol, US Dept of Homeland Security, US Marine Corps, Siemens, Shell and the list goes on.

 

BQT

BQT Solutions PTY LTD is a specialist in the development, manufacture and supply of high quality, high security card and biometric readers, electromechanical locks and related electronic security products.

They have a breadth of solutions and product ranges to tailor solutions to individual customer’s needs.

Products include a range of:

Biometric readers - BQT’s line of Biometric Readers combines our traditional line of readers with leading-edge bio-verification technologies including finger and Iris reader technologies for secure options right up to Military grade encryption.

Locking - physical

Access Control – smart cards readers and contactless smart card technology

 

Ava Global

Ava provides international secure logistics, through a partner network of independent service providers, of high value cargo on a fully insured door-to-door basis. This includes armoured vehicle collection and delivery at origin and destination, secure storage, commercial and chartered air and sea freight and customs brokerage services.

Servicing the following markets:

Bullion traders, Governments and central banks, Refineries, Financial institutions, and consulting services.

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