VICOM

[mikh]

Just took a look this company. It may be profitable, cash rich and pays good dividends but it does not convince as an aggressive business expanding well with a great (in contrast to good) business.

1. Setsco is the division growing its revenue. However, based on FY2010 AR, its Ops Profit of $9830k is about the same as the Vehicle Inspection's $9544k.
2. Unclear if Vicom still has 70% of market, and i could not see how the original 70% was derived. StarAuto also claims to be a leader. So it could be an issue of definition. I could claim to have 90% share for vehicle inspection in my home.
3. Some competitors in Setsco's areas appear to be SGS and STS (a unit of ST Kinectics). These would be formidable competitors. Could Vicom buy over STS just like it did Setsco? Doubt it because STS probably much more bigger, with better expertise.
4. However as pointed out, testing could be a growing market. Does it have expertise or a moat? Is Setsco pushing its business aggressively? Based on its website, there's not heavy marketing ambition. Can't see how it would have very special expertise beyond maybe a few individuals. Of course this could change later. Would also accept that this is just a personal, single facet assessment from its website.

That's not to say Vicom may not be a good investment.

My 2 cents on an unfamiliar business after reading the interest from forummers. Please feel free to re-butt.