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Dec
8
Avante Logixx heads list of Investorfile Top Picks for 2020
Posted by: Gerry Wimmer
12/8/2019
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Sangoma Technologies (TSXV: STC), a three-peat Top Pick performer, Questor Technology (TSXV: QST) and Quorum Information Technologies (TSXV: QIS) join Avante Logixx (TSXV: XX) as small cap stocks that have the potential for good returns next year.

Nine years and counting, the Investorfile blog continues with its annual tradition, whereby, in December, we comprise a Top Pick list. To do that, we become a predictor of a few investment themes for our current list of Top Ideas that may have a positive impact on the stock price as a "percentage gainer” for the New Year. While we do not advocate a short-term investing focus for generating investment gains, over the years we have had some success with our annual Top Picks. We want to emphasize that this list does not preclude the potential for any of Investorfile’s Top Ideas to become a top performer stock in 2020, too.

This year Investorfile has four stocks that make our Top Pick list rather three stocks as in most previous years. This is due to our high conviction for each pick and their ability to continue to generate investment gains in the upcoming year.

Investorfile predictions for 2020:

1. Our Top Ideas stock that could see its revenue multiple expand significantly.
    Prediction is: Avante Logixx Inc. (TSXV: XX- C$1.51)

Avante Logixx Inc provides best-in-class and high-end residential and commercial security services across Canada. The Company has four distinct operating divisions: Protective Services, Electronic Security, Security Devices & Hardware and Monitoring & Managed Services.

Through acquisitions and organic growth, Avante Logixx has grown significantly over the past 18 months. With the integration of its most recent acquisition (A.S.A.P Secured Inc.) the Company has a 12-month revenue run rate of approximately C$70 million. At the moment, the stock of Avante Logixx (on a fully-diluted basis) trades at a valuation equal to 60% of its annual revenues. We think there will be re-rating of this revenue trading multiple and, therefore, it will expand to at least one times annual revenues, equivalent to about C$2.60 per share (based on its current capital structure) as the Company continues to report stronger EBITDA.

Last Investorfile blog post (Sept. 2019):
Time to accumulate stock in Avante Logixx again

2. Our Top Ideas stock that should see a continuation of its trading momentum.
    Prediction is: Sangoma Technologies (TSXV: STC- C$2.49)

Sangoma Technologies delivers Unified Communications solutions for SMBs, Enterprises, OEMs, Carriers and service providers. The Company’s scalable offerings include both on-premises and cloud-based phone systems.

This is the third year in row that Sangoma Technologies has appeared on Investorfile’s annual Top Pick list and the stock continues to perform. The shares are up another 85% in value from last year. The Company is experiencing good growth, both organic and through acquisitions, which has driven its market capitalization to over C$180 million. We think Sangoma Technologies will continue to grow in 2020 and make more acquisitions. This will attract more institutional investors and continue to build the trading momentum for the stock.

Last Investorfile blog post (Feb. 2019):
Sangoma Technologies could be a $2.50 stock this year

3. Our Top Ideas stock whose share price will reclaim its all-time highs.
    Prediction is: Questor Technology (TSXV: QST- C$4.31)

Questor Technology Inc. is a leading provider of waste gas combustion incineration solutions to improve air quality. The Company's proprietary incinerator technology--which is safe, reliable and very efficient--is deemed a best-of-breed clean-air solution for oil and gas producers needing to comply with stricter emission regulations now being enforced.

In 2018, the Company had its highest yearly revenue and earnings in history. This year, Questor is expected to exceed those financial results. We believe that in 2020, the Company will report even more significant growth in both revenues and earnings as Questor continues to diversify its customer base by operating in more States within the USA and internationally. As such, the Company stock price should reclaim and surpass its all-time trading high of C$5.36. Six analysts currently provide research coverage on Questor Technology, and all have "buy” and "outperform” ratings.

Last Investorfile blog post (May 2019):
Questor Technology stock passes the $5.00 mark and can still double

4. Our Top Ideas stock that will be discovered by more institutional investors.
    Prediction is:Quorum Information Technologies (TSXV: QIS - C$1.05)

Quorum Information Technologies Inc. is focused on developing, marketing, implementing and supporting its portfolio of software and service solutions for automotive dealerships. The Company says its vision is to build a single, integrated, end-to-end business process solution for North American automotive dealerships that covers all of their business-critical processes.

Over the past 12 months, Quorum Information Technologies has transformed itself into a much bigger company through acquisitions and organic growth. Today Quorum has a very large recurring revenue base and is growing profits. This trend will engage more institutional investors and analysts to this story, which should continue to have a positive impact on the valuation of the Company’s shares.

Last Investorfile blog post (June 2019):
Large recurring revenue base provides excellent visibility for Quorum Information Technologies and its near-term prospects

Author’s ownership disclosure: Yes - XX, STC, QST, QIS.


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.com is not engaged in an investor relations agreement with Avante Logixx Inc., Sangoma Technologies Corp., Questor Technology Inc. and Quorum Information Technologies Inc. nor has it received any compensation from Avante Logixx Inc., Sangoma Technologies Corp., Questor Technology Inc. and Quorum Information Technologies Inc. for the preparation or distribution of this article.

The author of this article has acquired and may trade shares of Avante Logixx Inc., Sangoma Technologies Corp., Questor Technology Inc. and Quorum Information Technologies Inc. through open market transactions and for investment purposes only.

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Hi Gerry, Your philosophy is focused on principles that have been shown to produce above average results over time and your record has clearly proven that. Congratulations on a great blog and thank you for the hard work that you do in sharing and updating your ideas; it is much appreciated.