A microcap looking to secure its future growth
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Zedcor is a micro-cap stock trading on the TSX Venture exchange. Today it has a market cap of ~43 million CAD$ and is illiquid. Insiders own a reasonable amount of the float and it trades ~7x trailing earnings. It shifted its focus towards the security business a few years ago. It is starting to expand geographically with entry into eastern Canada and into the US market by the end of the year. It is also expected to continue to take new customers away from its traditional western Canadian based energy, construction and pipeline projects focused customers.
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What They Do
Zedcor sells contracts to their customers for onsite equipment to monitor and service their security needs. The equipment is part of a growing fleet of towers and other sensing and monitoring equipment owned by Zedcor that provides the service for their end customers. The service part of the business offering includes both a centralized monitoring team and some onsite personnel offerings.
There is some scale potential to the centralized monitoring which could help with improving operating margins as the business grows. Because the growth of the fleet is capital intensive, this growth seems less scalable in terms of margin improvement. The one potential benefit of growing the fleet is being able to offer larger customers additional service as they grow which means not having to rely on acquiring new customers, which should be cheaper.