Topic: Growth Stocks

Hot small cap stocks: Strong demand pushes up AlarmForce’s earnings

AlarmForce Industries, symbol AF on Toronto, sells two-way voice alarm systems and monitoring services in Canada and the U.S.

AlarmForce’s system differs from others because it lets emergency operators verify an alarm by establishing immediate two-way voice contact with homeowners. It then dispatches security personnel to the client’s home. If intruders are present, the two-way contact can frighten them away.

In the three months ended January 31, 2011, the company’s sales rose 10.0%, to $9.9 million from $9.0 million a year earlier. Earnings rose 32.7%, to $1.6 million, or $0.13 a share, from $1.2 million, or $0.10 a share. The company holds cash of $10.2 million, or $0.84 a share, and has no debt.

AlarmForce mainly attracts new customers by aggressively promoting itself through radio and TV advertising. In all, the company had 116,700 subscribers on January 31, 2011, up 2.8% from 105,300 a year earlier.

Demand for security systems is growing steadily. As well, AlarmForce has developed a remote video system called ViewForce that it plans to start selling by late summer 2011.

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