That day, I was conducting my flagship The Systematic Trader Course when one of the new graduates asked me about my view on Vicom share price. He bought it around $4.80 in 2017 but sold it around $ 5.80 about 2 years later. The price continued to rally but he didn’t buy it back. He was asking me when is it a good time to buy? So let us take a look at Vicom Ltd and its business.
Vicom Ltd’s Background
VICOM Ltd is Singapore’s leading provider in inspection and technical testing services. A pioneer in vehicle inspection services, they were incorporated in 1981 and publicly listed on Singapore’s stock exchange in 1995. Anyone who owns a car in Singapore would probably know about VICOM’s business and the dreaded time we spend at their inspection services. Vicom Ltd is a subsidiary of ComfortDelGro Corporation Limited. VICOM wholly-owns five of the nine vehicle inspection centers in Singapore and holds a majority stake (78%) in two other centers managed by JIC Inspection Centers. So technically speaking, VICOM has more than 75% market share of the vehicle inspection business services in Singapore. Talk about a monopoly! For the last 10 years, the average dividend yield is about 4.8%. In the last year, the dividend yield is 4.9%.
My View on Vicom Ltd
For me personally, even if the fundamental of the business is good, I also like to check the market cap of the company. If the market cap of the company is too low, using fundamental analysis may not work as they are out of the radar of fund managers. For the market cap of Vicom it is now 695.867m which is ok in my view. My lowest requirement for market cap for Singapore stocks in 100m. For the US it is at least 2b. Next, I will still use the chart to time my entry and exits. If it is for the long term, I will use the weekly charts. I will use GMMA just to understand the trend and the possible change of trend.
From 2015 – 2017, Vicom Ltd is sideways, you can also see the GMMA crisscrossing and unclear. From Jul 2017 onwards, the trend becomes clearer. That will be the entry price for the long term. I will continue to hold the stocks so long as the price is trending above the group of green lines which represent the long term investors.
Alternatively, I can also use a system like TradersGPS to help me. TradersGPS is a trading system that I have invented using all my knowledge of technical analysis to help the user determine when to buy or sell.
Using the TradersGPS, I will be able to buy the stock around Mar 2017, TradersGPS show me in Mar 2017 and Mar 2019 that the stock is on an uptrend and the Trend Impulse Factor tell me that the trend is strong. I will continue to hold the stock until the candles turn red. With TradersGPS, we will not exit too early and miss out on the big trend.
Vicom is still on an uptrend. The support is around 7.60 price (see the dotted red line), I will not sell until the candle turns red based on the system. In the meantime, I will continue to use Vicom’s services in Singapore for my car. Let me know your thoughts about their stock price or their business in the comment below.