wigram, it's just silly to compare VCR or ERG with RDF. You obviously have not had a decent look at RDF and particularly the ability of the CEO of the traffic division. ERG was a bag of worms and was always high risk, almost impossible to get an accurate idea of profitability or even revenue and badly managed to boot. It was purely a punters stock and good for you if you made money on it.
The RDF traffic CEO has squeezed most of the risk factors out of the stock with virtually the only risk now being installation risk. Instals have gone from 10 to 15 a month in less than 6 months with 20 a month from now on being pretty certain and then 25 a month from year's end. Existing installed systems are very profitable with the company in profit from about mid last year. This was achieved on an average of about 170 live systems, there are now about 260 live. December will see 450 to 500 live. They have over 600 systems contracted so plenty of backlog to work on. The thing is that Redflex is now No.1 in the USA and is the providor of choice. This has given them even more pricing power and the latest contracts have been won on premium rates with sometimes Redflex winning with the highest quote. For anyone prepared to take the time you can look at some of the individual contracts and work out profitability from public information which is usually on the city's web site. It is one of the simplest companies to value that I have seen. Long term contracts with semi government clients, pure 'click' revenue but so much more transparent than your ERGs etc.
It is not a punters stock, before making your $1.30 prediction you really should take even just a few minutes to see the difference in this company. Have a read also of the Intersuisse reports on the Redflex website, might give you a bit of enlightenment.
RDF Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
