Redflex picks up Albany OR contract

Don’t run any red lights in Albany.

You may recall that about 18 months ago I invested in an Australian company called Redflex. This company makes automated traffic control systems, and sends you a ticket in the mail if you get caught running a red light. Sue got caught by one of their systems in Minneapolis about 2 years ago. I was so impressed with the technology, I began researching it and really liked the business model. Redflex splits the fines with the city in return for installing and running the system (so the city pays nothing for enforcement). It was just getting started in America, so I got in early. This business model is the ultimate monopoly since the business is protected by a city contract, and people will continue to break laws, right?

Now, you get the benefits (as long as you don’t run a red light) of this technology. Safer streets and more police time to chase bad guys rather than monitoring intersections (or speeders, when you get the Redflex speed enforcement system down the road).

I see that Salem also just entered a contract with Redflex. Corvallis has not done so yet. California and Washington have many systems, as does Arizona. Redflex USA is based in Scottsdale.

If you want to buy the stock, you can buy on the Australian exchange, ASX, as RDF for about $3.19 per share. In the USA, you can buy OTC as a pink sheet stock: RFLXY for about $20 (there are 8 ASX shares to one OTC share, times the exchange rate difference of 1.30 to 1). The price is now just about where it was when I bought in, so you haven’t missed anything. It is a small / speculative stock, so I wouldn’t buy too much. But it will be fun to see their systems around town as a stock owner.

Here is the announcement and the website.

http://www.redflex.com.au/ASX_announcements/PDF/432390.pdf