I tried out my Questrade account yesterday and bought a very small initial position (less than 1% of my port) in a small company (ZED) that trades on the Venture Exchange. For those of you unfamiliar with the company here is an excerpt from the “about us” section of their website:
"Zedi (TSX Venture: ZED) specializes in production operations management, delivering systems and services that help oil and gas producers to better manage people, assets and information. We help our clients to increase earnings from production, decrease operating costs, best utilize human, physical and fiscal assets and mitigate compliance risk."
Here are my reasons for buying:
-over 90% of their revenues are reoccurring
-their main market (small to intermediate oil/gas trusts) has been under pressure recently.
-projected 2007 P/E of 12
-projected 2008 P/E of 7.7
-top line growth of 35%-40% a year.
-very little debt – current ratio of around 5
-trading at 2X book (I think this is cheap considering they are primarily a software company)
-I like their core business.
-I like their technology.
-37.1 million in revenue and a market cap of only 91 million.
-For two years in a row, Zedi has ranked in Deloitte's Technology Fast 500: a ranking of the fastest growing technology, media, telecommunications and life sciences companies in North America, based on revenue growth.
I just want to point out that this is a very small company (91 million market cap) that trades on the venture exchange and as such is much higher risk than companies I usually invest in, so anyone considering buying it should first of all do their own research but also be aware that it is going to be quite volatile. If you would like to know more about the company here is a link to their website.
This was the first time I have used my Questrade account so I'll give you an update tomorrow on what I like/don't like about the account.