Security/Surveillance biz: I don't know SILV or ULTK, but I occasionally follow a couple of the other publicly traded companies. Sensormatic (SRM), which has had its full share of troubles (management/owner control) and Vicon (VII). I no longer own SRM. (Sorry I missed the last great run up. Got scared off by a potential technology shift in source tagging developed by Eastman Chemical.)
I do have a small position in Vicon. At 6 1/4, it's selling below it's tangible book value ($6.86/sh), at 3.3x ebitd, and with a 16% ROE. P/e is about 6+. Although linked closely to US Post Office business, they did get contracts for a couple of "prestigious" installations - Motor City Casinos and Harrah's (New Orleans). Earnings may suffer in the short run as they (too)increase expenditures for product development caused by the "convergence of digital video, computer technology and traditional CCTV platforms".
Given what I perceive as the competitive nature of the business, the small size
of VII and SILV, the resources of larger companies (SRM), the potential arrival of new entrants (perhaps LOGIY- Logitech with its digicams?), my opinion is that
at this point, it's not such a great industry to be investing a large portion of one's portfolio.
Just my opinion, and I've been wrong many, many times before.
Paul Senior |
