Avid Technolgy Inc. (NASDAQ–AVID)

Valuation-$28.10

Price January 19, 2015-$14.00

Avid has been through the SEC “Restatement Mill” over the past few years and has emerged on the other side just fine. It took tens of millions to get there though.

Latest earnings were for the third quarter ended 9/30/2014. Avid’s revenues were up 2.5% to $142.4 million and they posted a GAAP profit of $.36 a share versus $.07 last year.  If you exclude the $8.6 million in restatement costs in Q3 2014 ($8.7 million in Q3, 2013) and the other Non-GAAP items, they made $.57 a share versus $.36 last year. For the nine month period they earned $1.10 versus $1.12 a share on a Non-GAAP basis.

Net cash, which has been sucked dry by all these restatement costs, was about $14 million or $.37 per share.

There have been a number of insider buys up to $14 a share.

In the interest of full disclosure we bought AVID a few months back at $12.98 a share, but after pulling back from over $15 in the recent downdraft we think this is a good entry point again.

Institutional holdings of AVID are only about 7% per NASDAQ.com, so if they can generate some interest here we think the stock could soar.

Trading at only 50% of our valuation we think this is a BUY.

There are about 39 million shares outstanding and it trades about 190,000 shares a day.

About AVID: Through Avid Everywhere(TM), Avid delivers the industry’s most open, innovative and comprehensive media platform connecting content creation with collaboration, asset protection, distribution and consumption for the most listened to, most watched and most loved media in the world—from the most prestigious and award-winning feature films, music recordings, and television shows, to live concerts and news broadcasts. Industry leading solutions include Pro Tools(R), Media Composer(R), ISIS(R), Interplay(R), and Sibelius(R).