RBC Capital Markets comments on Avigilon CorporationAccording to RBC Capital Markets:
AVO – More reshuffling of the management team
Sentiment Indicator: negative
Wednesday, September 2, 2015
Our view: We expect some negative reaction in the share price relative to the market this morning. Management turnover has been a significant area of investor concern over the past 12-18 months, a pattern which continues with today’s announcement. Of concern is that their top two operations executives are departing ahead of the full commercial launch of their US clone facility.
The declines in AVO share price in recent months does make the valuation much more interesting (currently trading at 12.6x 2016E P/E), though in uncertain markets we expect the management changes will sustain some investor caution.
Departure of operations executives: Bryan Schmode resigned as COO, though is expected to provide consulting services to the company to ensure business continuity over the next year. Mr. Schmode was with the firm for over 7 years. Former SVP Global Operations Collis Heath also left the company after joining the company earlier this year.
Seven major departments all reporting to CEO: Product development, sales, marketing, operations, finance, legal and HR will now reporting directly to the Founder, President and CEO and Chairman of the Board Alexander Fernandes.