An aggressive investing stock that focuses on security

Aggressive investors need to be more skeptical and discriminating than conservative investors, because they take on great risk. Conservative investors mainly buy well-established companies with a history of earnings and possibly dividends, and a secure hold on a growing, or at least stable, clientele.

When an investment like that runs into problems, its stock price can fall — sometimes drastically. But it will usually survive. It can then go on to prosper all over again when good times return.

When something goes wrong with an aggressive investing stock pick, there is far greater risk of serious, if not total, loss.

That’s why your aggressive investing picks should only make up only a reasonable portion of your portfolio — certainly no more than 30%. This even applies to those we recommend in our Stock Pickers Digest newsletter. However, a few investments like these can make a big improvement in your total return.

AlarmForce: An aggressive investing pick with a unique approach to home security

In the latest issue of Stock Pickers Digest, we update our views on AlarmForce Industries (Toronto symbol AF). It’s an aggressive investing selection that’s certainly not without risk, but it’s prospering in a growing industry.

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AlarmForce sells two-way voice-alarm systems and monitoring services in Canada and the United States. The company has over 96,000 subscribers. 85,000 are in Canada, and 11,000 are in the U.S.

What makes AlarmForce’s system stand out from others is that it lets emergency operators establish immediate two-way voice contact with homeowners to verify an alarm. It then dispatches security personnel to the client’s home. If intruders are present, the two-way contact can frighten them away.

AlarmForce has gained a high profile from radio and TV advertising. It adds new subscribers by giving its system away in return for a monitoring service at $25 a month, with a three-year contract. AlarmForce makes and owns each system.

U.S. expansion adds risk to this aggressive investing stock pick

The company continues to expand in Canada, and it also plans to continue adding subscribers in the U.S. Although the U.S. market has huge potential, many profitable Canadian firms have attempted to access it before, with mixed results. As well, AlarmForce will be competing with some established American players, such as ADT Security Services. The company seems to be mitigating this risk by taking a steady, disciplined approach to its U.S. expansion. We’ll take a closer look at its strategy in Stock Pickers Digest.

You can get our updated recommendation and an in-depth report on AlarmForce and other aggressive investing stock selections in the latest issue of Stock Pickers Digest. Plus, if you subscribe now, you get one month free. You have no risk. Click here to learn more.