Vicom with a good set of Q1 2012 results | Investment Moats Skip to Content

Vicom with a good set of Q1 2012 results

One dividend stock that I missed out on was really vehicle inspection and general testing company VICOM

  1. A strong business model that is based on something always needed
  2. Zero debt
  3. 43% of balance sheet is in cash, 16% of its market cap is in cash
  4. Yield has went down to 3.4%
  5. One of the few stocks that have been resilient in the GFC
  6. Have been raising dividend payout yearly
  7. PTB is around 3.8 times indicating that return on assets should be pretty high
  8. PE of 14 times or 7% earnings yield

Vicom announced their results today again. View it here. Once again it’s the same old story, Profit up 13%, adding more cash.

I waiting for it to correct to add in. I missed my chance. This is a stock that have very strong moat, low capex and very cash flow generating.

Which would I invest in? A REIT at 6-7% yield or VICOM? I believe VICOM stands out. Even though its yield is lower, but its earnings yield is unlevered compared to the REITs and very defensive. The only thing is the price we pay is high from the historical perspective. Not much safety. Definitely a grower.

Are you suffering from willful blindness when it comes to investing?
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James

Saturday 12th of May 2012

You had an entry about Yongnam back in April. Just curious, are you accumulating it?

Drizzt

Sunday 13th of May 2012

Hi James, no i do not have a particular interest in Yongnam. Its a favorite of my friend so i am doing it as a favor for him

Musicwhiz

Friday 11th of May 2012

My greatest regret is not buying more of this gem when it was trading around $3.50. On hindsight, should have bought this back in 2010 when I began researching it! Oh well.

Drizzt

Friday 11th of May 2012

Hi James,

I also not sure, but kept thinking the yield is a tad low for my liking.still gives me time to think what are the chnages in local trend that would break their model.

in the years that i watched this, i have not seen them face any large issues before.

i know one guy bought 3.20 sell 3.80 and think it is fully valued but apparently Vicom's ability to improve is much more than what he expected.

Drizzt

Friday 11th of May 2012

Foodie, VICOM earns from vehicle inspection. you have to send your cars in for inspection and if COE is high, it is a good thing for them. the have a general testing company call SETSCO which is the real gem because its business is flourishing and is a high contributor.

James

Thursday 10th of May 2012

What price would you recommend to accumulate? The stock price has been going up in a straight line. o_o

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