Zedcor Inc - Oil field rental company turned mobile live surveillance company.
A pivot on the TSXV that went well
This one’s been in the drafts for a while. Dated only by these two relics of the ancient past.
The product is curious to me as it seems like the rental fleet has reasonable expectations to eventually have a much larger footprint (450 mobile units currently up from 220 last year).
Zedcor is a company I’ve looked at for around 2 years and have unfortunately only owned for 18 months (it ran up in that first 6-month period). Zedcor was born out of an oil field rental services company, and it pivoted to these towers which eventually found themselves dotted along the Trans Mountain Pipeline. I don’t have the exact figures (not that it matters anymore), but during its construction Zedcor had well over a hundred of these things scattered along the pipeline. They’ll be crossing 1,000 towers soon if they haven’t already.
The different segments here are well covered by looking through management discussion and analysis on SEDAR, their website, and SCD’s interview with management. There are both fixed and mobile assets, with tower rental/surveillance monitoring agreements being the bulk of their present business.
After stripping out Zedcor’s other income (they have a 3 year earn out based on EBITDA targets of the business unit they sold), it’s certainly not at an optically cheap stock. I didn’t write it up because I was worried about just how aggressively their management was pushing for growth (forcing them to go to capital markets). Every tower is front loaded capex, and the growth numbers management is guiding to are large. At the same time management says they’re pulling their money out of every tower in an 18–24 month window, so I can understand the aggressive posturing from their chair.
Further, just recently a capital raise did take place. The private placement of $4M CAD was supposedly filled in under sixty minutes.
Someone’s taken notice of something they like, and it looks like private funding sources are willing to pay up for the stock despite the “not optically cheap” numbers Zedcor has for a microcap. Which for the TSXV is quite a nice sign given Zedcor’s stock is roughly +100% YTD.
After receiving complaints that I’m not putting out enough differentiated content, I suppose that’s reason more than anything to get this out of the drafts.
I own shares of Zedcor at a substantially lower cost basis to where they currently trade. None of this is investment advice.