Avante Logixx Inc. (TSXV: XX) and AirIQ Inc. (TSXV: IQ) could be next on the list of small
cap stocks whose big investment gains are triggered from takeovers.
A
shareholder value–enhancing event like a takeover is never factored into
Investorfile’s share price targets for our Top Ideas. That said, for the most
part, historically takeovers have been very rewarding for shareholders who have
made investments in Investorfile’s Top Ideas small cap value stocks.
Of our 18
Top Ideas profiled to date in the Investorfile blog, six stocks are no longer
publicly listed on a stock exchange as a result of a takeover or privatization.
The average total investment return on our first six Top Ideas that were subject
to a takeover or privatization is approximately 254%.
Investment
gains for Investorfile Top Ideas triggered with help from takeovers or
privatizations:
2017: RDM
Corporation +708%
2017: IWG
Technologies Inc. +95%
2015:
Wanted Technologies Corp. +478%
2014: DDS Wireless International Inc. +48%
2013:
Radiant Communications Corp. +180%
2013: Galvanic Applied Sciences Inc. +17%
It is our
opinion that any one our Top Ideas could be subject to a takeover bid, but
there are two stocks that have moved to the top of our list that may have
near-term takeover possibilities:
- Avante Logixx Inc. (TSXV: XX –
C$0.29): The Company just announced that the Board of Directors will be conducting
a strategic review, which opens up the potential sale of the Company, which we
believe could unlock the value for shareholders. In a recent research note
issued by Cormark Securities, their view is that "Avante has successfully
differentiated itself with its integrated security platform and niche high-end
focus, making it an attractive takeout target for a larger security company
looking to capture market share by expanding its product offering.” Cormark
Securities has a $0.45 target price for this stock.
- AirIQ Inc. (TSXV: IQ - C$0.18): In a
recent public filing, Vecima Networks announced it has acquired a large block
of shares of AirIQ at a price equivalent to C$0.17 per share. It now has a 21.3
per cent ownership position in the Company. Vecima Networks provides fleet
managers the key information and analytics they require to optimally manage
their business under the Contigo, Nero Global Tracking and FleetLynx brands.
Vecima Networks operates in the same business segment as AirIQ, which provides
fleet operators and vehicle owners with a suite of asset management solutions
to reduce cost, improve efficiency and monitor, manage and protect their
assets. We believe in the scenario that Vecima Networks may make an offer to
purchase the rest of the shares in AirIQ at premium to the current trading price.
The Investorfile blog thesis is all about investing in
undervalued small cap companies that are fundamentally strong and which can be
very rewarding. But, more often than not, a shareholder value–enhancing event
like a takeover of such companies can generate significant premiums to the
small cap’s stock price and, just as important, instant liquidity for such
investments.
Author Ownership Disclosure: Yes - TSXV: XX, TSXV: IQ.
Read Disclaimer:
This article is for informational purposes only. This article is based on the
author's independent analysis and judgment and does not guarantee the
information's accuracy or completeness. The information contained in this
article is subject to change without notice, and the author assumes no
responsibility to update the information contained in this article. The
information contained within this article should not be construed as offering
of investment advice. Those seeking direct investment advice, should consult a
qualified, registered, investment professional. This is not a direct or implied
solicitation to buy or sell securities. Readers are advised to conduct their
own due diligence prior to considering buying or selling any stock.
Investorfile is not
engaged in an investor relations agreement Avante Logixx Inc. and AirIQ Inc. nor
has it received any compensation from Avante Logix Inc. and AirIQ Inc. for the
preparation or distribution of this article.
The author of this article has acquired and may trade shares Avante Logixx Inc.
and AirIQ Inc. through open market transactions and for investment purposes
only. |
