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ActionView International (OTC BB: AVWI)
I started studying ActionView
back in September. When I first looked at their business model, I was struck
by the elegant simplicity of their point-of-purchase advertising technology.
Sometimes simple is best. Sometimes
being first to market with a simple but highly effective idea puts you
at the front end of a steep growth curve.
When I first looked at the company
I couldn't help but be reminded of another simple idea I followed in the
90's. Koala Corp (NASDAQ: KARE) came public at that time.
Koala came up with the simplistic
idea of manufacturing and selling fold down baby changing stations for
public restrooms. The changing tables folded up into the wall like an ironing
board or a murphy bed. A parent could walk into the bathroom, pull down
the changing table, place the baby on the table, and change a diaper. A
simple and elegant solution for a parentally challenging public problem.
Today there are Koala changing
tables in public restrooms all over the country. They're in every nearly
every department store, restaurant chain, and airport.
The stock was trading at about $2
in 1994. From 1995 to 1996 the stock traded into the $10 range.
From 1996 to 2001 the stock traded into the $16 range. This
time period represented the steep end of their growth curve, and investors
8 times their money over that explosive six year period.
Sales accelerated rapidly because
of the size of their customers. One sale to a Nordstrom department store
or a Denny's restaurant chain represented installations in hundreds of
The company has since fallen on hard
times. Their business model was flawed over the long term. There was no
significant recurring revenue model. Once they penetrated their market
and made the sale the fun and profit was over.
ActionView International has
the same kind of simple idea, with one major improvement. Their business
model is totally focused on the recurring revenue theme, and once the company
hits critical mass cash flow and profits should be prolific. Early returns
from product testing are startling, and the company is starting to climb
the steep end of its growth curve.
ActionView Point-Of-Purchase Sign
Pictured here is the revolutionary
point-of-purchase back lit scrolling sign. It's been five years
in development, and there are several patents pending related to the technology.
This sign is capable of scrolling
different high color, high impact, computer generated images. Studies
indicate the presentation generates a 47% content retention rate, vs 17%
for its static counterpart. One day you will see one close up- they really
grab your attention.
The signs come in several sizes ranging
from the 2'x4' shelf top version to a 9'x12' wall installation. The signs
are portable, can be made to match any decor, and easily programmable with
a PDA or laptop.
60 percent of all buying decisions
are made at the point of purchase. Advertisers know this, and struggle
with the challenge of getting their product in front of the consumer at
the optimal moment when a buying decision is made. ActionView signs
solve the problem.
There are about 75 ActionView
signs currently installed worldwide. The early test returns are remarkable.
Early Test Returns
Several tests were recently completed
at Woolworths', Australia's leading grocery store chain. The company
boasts over 500 locations. The tests were conducted in a store located
in Adelaide (Rundle Street Mall location).
Two different products were tested.
The results were as follows:
The most startling result was garnered
in another recent test conducted by Woolworths' in Australia. The company
embarked on a nationwide promotional campaign for an "Ice Break Chocolate
Milk Drink". During the promotion, stores were averaging sales
of approximately 100 units per week over a 13 week average without the
When a Cadbury's Nut Chocolate Bar
was advertised, sales increased 50 times over normal levels.
When Gillette Razor Blades were
advertised, sales increased over 10 times.
When an ActionView sign was
in place and advertising the product, weekly unit sales skyrocketed to
units per location, a twenty fold increase in results.
Based on the early returns from these
tests, it appears the ActionView signs generate a prolific response
at the holy grail of advertising- the Point-of-Purchase.
News: ActionView Installing Twenty Five Signs in Dubai
Today, just after the market closed,
announced it had received a purchase order for and was beginning the installation
of 25 signs in the newly finished World Trade Center in Dubai, United Arab
Emirates. Pictured here, this recently opened $300 million shopping and
convention center hosted delegates from 122 countries at the 2003 International
Monetary Fund meetings.
ActionView participates in
the advertising revenues generated by the signs. According to the press
release, ActionView expects to enjoy net earnings of about $500,000
annually from the advertising fees generated by the signs.
As in the Koala example mentioned
earlier, a single agreement can yield placements at multiple locations.
Many of the stores within these chains have enough floor space for several
signs. ActionView is currently test marketing and in discussions
with the following:
Woolworth's of Australia (500 locations)
Shoppers Drug Mart (825 locations)
Cineplex Odeon (135 locations)
Canadian Tire (636 locations)
Vons Supermarkets (325 stores in
Home Depot (1000 plus stores)
Are Catching On
As you can see from the chart, investors
are catching on in spite of the company's low profile. In fact, today's
news release is the first real public disclosure the company has put out
since coming public through an RTO (Click
here to learn about RTO's).
Volume began surging in this stock
around the end of August. In July shares barely averaged 25,000 per day.
According to Yahoo! this stock now averages 125,000 shares per day.
Recent higher volume days have approached one million shares.
The company's business model is based
on a flow of advertising revenues. The company provides the signs. Retailers
provide the locations and the customers. Each sign is capable of scrolling
ads for 12 customers at a rate of $250 per month. At 70% usage, each sign
would spin off about $1,000 per month in positive cash flow on an ongoing
ActionView believes it can
have 1200 to 1500 signs in place by the end of its first full year of commercial
activity. The first four or five months of advertising sales recoups the
initial investment. Once achieved, high profit margins and strong cash
flow are the net result.
The placement of 1200 to 1500 signs
seems reasonable, as one sale with the right partner could equate to the
placement of 500 plus units, just as it did with Koala.
There isn't a lot of hard financial
data available on the company at this time. The first look at the company's
financial condition will come with the filing of a September quarterly
report, but that will only reflect one month of operations. The December
quarter will be far more revealing.
According to the SEC filings there
are about 22 million shares issued and outstanding. At $.90, this equates
to a $19.8 million market value. I certainly wouldn't describe the stock
as undervalued, but the market is clearly voting its belief there will
be substantial growth.
Fortunately, the stock has taken
a brief breather in its solid uptrend, and almost pulled back to the support
line. In light of today's news after the close, it seems highly unlikely
the support line will be violated in the short term.
Here are my thoughts on this trading
The excitement factor could be high
with this stock. If tomorrow's announcement is a deal with Woolworths'
(500 locations), or Vons (325 locations), or Shoppers Mart (825 locations),
the stock could rocket up the charts. They are talking to all of them.
Buy up to $1.10- A break above
$1.04 would take the stock to a new all time high- if you've been watching
you know what can happen when stocks break to new highs.
Price Target- $2 over
the next six months.
Stop Loss- A drop below $.75
would suggest lower levels are imminent.
For additional information on ActionView,
toll free investor relations phone number is 888-889-0888. You can also
visit the company's web site at: www.actionviewinternational.com/
Here is the complete text of today's
news release for your review:
|Press Release Source:
ActionView International, Inc.
Inc. Launches in a Major Venue -- The Dubai World Trade Center
Thursday October 16, 4:01
POINT ROBERTS, WA--(MARKET
WIRE)--Oct 16, 2003 -- ActionView International, Inc. ("ActionView") (OTC
BB: AVWI) announced today it has acquired the advertising contract for
a high-profile venue and will begin installing its computerized backlit
scrolling poster billboard signs into the newly finished World Trade Center
in Dubai, United Arab Emirates.
ActionView is currently
completing the installation of 25 scrolling billboards at the Trade Center.
Each billboard is capable of holding 12 scrolling images and one still-view
image. When operating at 75% capacity, the billboards can generate in excess
of US$2 million in advertising revenues each year at current rates within
the World Trade Center. The Trade Center's scrolling billboards generate
higher than normal advertising revenues per unit because of the exceptional
location. This advertising revenue-sharing contract will provide ActionView
with net earnings of approximately US$500,000 per annum.
"Our scrolling motion
billboard system was chosen for this world-class destination over all others,
further reinforcing our ability to compete on a world-wide basis. Our media
solution delivers first-class exposure for advertisers and attracts venues
like the World Trade Center in Dubai because of the quality and income
potential of our system," said Rick Mari, CEO of ActionView.
The Dubai World Trade
Center opened two weeks ago, hosting 122 countries for the 2003 International
Monetary Fund (IMF) meetings. The US$285 million complex has set a new
world standard for convention centers and has made Dubai the convention
city of choice for the Middle East and West Africa.
It is anticipated that
over the next 18 months, ActionView will establish 1,500 to 2,000 ActionView
Scrolling Sign locations globally.
About ActionView International,
Inc. is a marketer and franchiser of sophisticated and computerized backlit
scrolling poster billboard signs for local and international venues. Through
its proprietary 12-poster scrolling backlit sign system and revenue sharing
program, ActionView is positioned to make a serious impact on the multi-billion
dollar point-of-sale global outdoor advertising industry.
An investment profile
on ActionView may be found at www.actionviewinternational.com.
Investor Relations: 1-888-889-0888.
This release contains
'forward-looking statements' within the meaning of Section 27A of the Securities
Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Any
statements that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, goals, assumptions
or future events or performance are not statements of historical fact and
may be 'forward looking-statements.' Forward-looking statements are based
on expectations, estimates and projections at the time the statements are
made that involve a number of risks and uncertainties which could cause
actual results or events to differ materially from those presently anticipated.
Forward-looking statements in this action may be identified through the
use of words such as 'expects', 'will,' 'anticipates,' 'estimates,' 'believes,'
or statements indicating certain actions 'may,' 'could,' or 'might' occur.
On behalf of the Board
of Directors of ActionView International, Inc.
ActionView International, Inc.
Source: ActionView International,
Charts Provided Courtesy