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-David Paul Morris/Bloomberg

Chris Umiastowski is the growth investor for Globe Investor's Strategy Lab. Follow his contributions here and view his model portfolio here.

I've been following GoPro Inc., the action-camera manufacturer, ever since its hot initial public offering in June, 2014. Anyone who bought at the IPO, which was priced at $24 (U.S.), went on the kind of wild ride you might expect from the company's customers, who strap on a GoPro as they participate in thrill sports that probably drive their mothers crazy.

The stock soared to nearly $100 by October, 2014, only to come crashing down to $45 by February, 2015, when I wrote about my intrigue with the stock. But I never pulled the trigger. I sat on the sidelines watching to see how the story would develop. It rose again briefly, but has now fallen like a skydiver and sits at about $28 a share today. On Wednesday, it his a record low of $26.68.

But that's just the stock history. What about GoPro the company? If we have a solid company on our hands, maybe we should be taking advantage of the incredible price decline that has momentum chasers scared.

Let's be clear: I love momentum, but I'm talking about business momentum. I believe in buying good businesses and letting the stock market take care of valuation in the long run. I only tend to get excited about short-term opportunities when a stock seems to take an unfair beating, which creates an interesting entry point. This is what I suspect is happening to GoPro right now.

GoPro definitely has business momentum, too. It posted $420-million in revenue, or 72-per-cent year-over-year growth, in its most recent quarter. That's 72-per-cent growth from the IPO pricing, and after all the crazy volatility, GoPro stock is only 18 per cent higher than that public offering. We're now looking at a stock that analysts expect to post earnings per share of $2.03 next year, implying a price to earnings ratio slightly over 13.

This is the kind of situation that, to me, is perfect for simplistic analysis. Either something is very wrong with the GoPro story or the stock is a bargain. If nothing seem to be truly wrong with the story, I'm a buyer.

Let's start by considering where this industry is going. Durable action cameras, on their own, are probably still going to be a growth market for several years. I don't own one and most of the people I know still don't own one. But in the next five years, I think the market is quickly going to move toward 360-degree cameras so that action-packed video footage can be enjoyed through virtual reality headsets. This trend, along with the trend toward more drone-captured footage, suggest to me that GoPro's market is in good shape. It's noteworthy that GoPro has invested in 360-degree video technology and has announced plans to release a drone to the consumer market.

At the same time, I'm impressed with the brand power that GoPro is busy creating. Who's the No. 2 player in the action camera market? If somebody handed you the cash and told you to go buy a similar camera to the GoPro Hero but made by another company, what would you buy? My informal poll suggests that GoPro so heavily owns this market that people don't even know what other brand to look at. GoPro's brand dominance only seems to have strengthened in the 16 months since its IPO.

Is the stock a long-term buy and hold? I don't know. I feel that GoPro's products are more hardware-centric and at more risk of commoditization by competitors in the long run compared with companies who are deeply set apart by their software, such as Apple. So I'm bullish on GoPro given the low expectations that seem to be priced into the stock. I also feel that the transition toward 360-degree drone-captured footage is sufficiently important that GoPro could be an acquisition target (possibly by Apple).

I'm not ready to say that GoPro is the kind of company where I'd feel comfortable tucking the stock away for 10 years. It might turn out to be a brilliant long-term investment. But right now I'm comfortable suggesting it as an opportunistic value play in a fast-growing market.

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