TOP IDEAS: Avante Logixx’s (TSXV: XX) trio of acquisitions has built the annual revenue base to $20 million. Short-term, the Company is positioned to deliver good profit growth. Longer-term, the Company may be a takeover candidate in the active M&A security services space.

Investorfile's share price accumulation target of $0.40 for Avante Logixx Inc. was reached on January 7, 2014. For the record, we do not revise share price targets for our Investorfile Top Ideas - Small Cap Value Stocks. We have positioned our blog to be one of the first providers of a pragmatic perspective of a small cap company stock's potential worth, where there may be uncovered value that has been largely overlooked by the investment community.

Even though this stock had exceeded our price accumulation target of $0.40 but has retreated since, the Investorfile blog views the shares of Avante Logixx Inc. (TSXV: XX - $0.25) as an excellent buying opportunity to take advantage of today as one of our Top Ideas - Small Cap Value Stocks.

Avante Logixx provides best-in-class and high-end residential and commercial security services, including system design and installation, rapid alarm response, alarm monitoring, video analytics, locksmith services and hardware and secure transport through the use of advanced technology, with a focus on client service. Based in Toronto, the Company has grown to approximately 120 employees.

Over the past two years Avante Logixx has closed on three acquisitions: INTO-ELECTRONICS (INTO), a Toronto-based commercial and high-rise security integration, monitoring and electronic building management firm; LVS Inc., a Greater Toronto Area high-end custom residential security and automation services integrator; and City Wide Locksmiths Ltd., a provider of residential and commercial locksmith services and a distributor of decorative door hardware operating in the Greater Toronto Area, of which Avante acquired a 70% interest.

We recently revisited with the Management and Directors of Avante Logixx at its Annual General Meeting held last week at the Company’s head office and main security monitoring centre. As such, we have come away with the opinion that the Company has executed on a number of strategic fronts which point towards strong financial performance for fiscal 2017.

The most significant achievement is the integration of Avante’s recent acquisitions. Management indicated at the AGM that the integration process has progressed to a point that the business benefits derived from a larger operation such as cross-selling opportunities and cost savings should favourably impact the Company’s profitability in each of the remaining quarters of fiscal 2017 and beyond.

Avante Logixx has already reported Q1 results for fiscal 2017: Revenues of $4.72 million were up 41%, adjusted EBITDA of $628,000 was up 49% with earnings per share (EPS) of $0.003. We feel the remaining three quarters of fiscal 2017 could produce sequential quarter to quarter gains for Revenues, EBITDA and EPS.

With three acquisitions made and largely integrated, we believe Avante’s management will continue with its active mergers and acquisitions (M&A) mandate to further support its multi-year growth potential. At the AGM, Management said that the pipeline of acquisitions opportunities remains robust.The Company has the financial capacity to make new acquisitions as it generates significant amounts of cash from its recurring revenue streams and currently holds a very small amount of debt.

We firmly believe that Avante Logixx continues to execute on its growth strategy which has positioned the Company for meaningful earnings growth in fiscal 2017 with still more upside potential from M&A. Therefore, the Investorfile blog continues to reiterate its buy recommendation of the Company’s shares by suggesting (again) that small cap investors should accumulate Avante Logixx’s stock up to a price of $0.40 from its current trading levels.

On a macro basis, security services companies are experiencing a wave of large scale M&A activity. Very high takeover multiples are being paid for this industry's recurring revenue streams. With its highly scalable business model and a growing stream of recurring revenues, Avante Logixx could be an attractive takeover candidate in the not-too-distant future and for a stock price that would be at a big premium to our accumulation target of C$0.40.

In conclusion: Avante Logixx’s stock has significant short- and long-term upside potential.

Avante Logixx has about 81.4 million shares outstanding. Management and directors own approximately 36% of Company’s shares.

Two investment analysts provide research coverage on Avante Logixx, both have buy ratings and 12-month stock price targets of C$0.45.

Company website: www.avantelogixx.com

Author Ownership Disclosure: TSXV: XX - Yes

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The author of this article has acquired and may trade shares of Avante Logixx Inc. through open market transactions and for investment purposes only.