7/31/24 - $avdx - 25% off is extreme, starting small7/31/24 :: VROCKSTAR :: NASDAQ:AVDX
25% off is extreme, starting small
- i don't have time to dig into the weeds, which is mainly why i'm keeping this smaller for now (25 bps starter toe in will force me to do more work after hrs)
- it's a NYSE:BILL comp which is why i pay attn (no position here either, but it's one of my favorite SMB names on short list), also NASDAQ:PYCR is on my list of stuff i'd like to eventually re-enter. point being - it's the name that's holding these things hostage.
- we all know the economy/ hiring/ services are a dumpster fire
- but there's a bit more probably going on here that's very technical on a compete rip-yo-face-off-the-other-way day. and that has to do with positioning and again silly gamma
- when i see the stock trading at 6-7x gross profit i think - in a multi-year nearly 20% grower context, that's cheap. low 3x sales (to EV), cheap. takeout possible, so i'm trying to build a small 50 bps to 100 bps positions in what i think will be the theme of 2H... M&A
- will this go lower? no clue. how much? i think we need to mind the $8 gap.
- the bid here has disappeared for now and it will take a total reversal of economic conditions to send us back where we came from (call that $12).
- however, is there probably balanced downside vs. upside into a YE and early '25 context? i'd posit - yes.
- so 15% lower to fill that gap from Nov '24... and i can size up the lower we go (assuming i like mgmt - i'll report back here when i have time later tn)
- and probably the upside is greater than this in a 6 mo context, i'd guess. i'd like to add below $9 and i'm unfamiliar w the name so i'm keeping it small for now.
tl;dr - good enough to start/ or play a swing if it reverses by end of week. keeping small bc less familiar, will ramp on it fast and report back. downside probably limited to 15-20%. i can handle stuff like this esp as i have trading/ sizing plans (always a good idea fam!).
LMK if u know on this one... or see differently
V
