Published Sat, 12 Aug 2017 07:22:18 -0400 on Seeking Alpha
Thesis The original analysis of Richelieu (OTC:RHUHF) in May 2017 is supported by a deeper analysis of its underlying fundamentals and business activities. The company has grown through acquisitions and maintained health EPS growth amidst modest increases to underlying costs. However, Richelieu is currently more than double what its Graham price would be. The company would be a worthwhile addition to a Canadian portfolio in the consumer goods sector, assuming it is bought on dips in its share price.
Overview To recap my previous description of the company:
Headquartered in Montreal, Quebec, Richelieu Hardware Ltd. is an importer, distributor, and manufacturer of specialty hardware and related products, focused on the North American Markets. Its primary customers are split amongst retail customers vis-à-vis the residential and commercial woodworking industry, home furnishing and office furniture manufacturers, and hardware and renovation superstores (e.g. Home Depot (NYSE: HD), Lowe's (NYSE: LOW)).
Companies such as Richelieu are appealing because they provide a pick-and-shovel play into multiple industries. As it provides services to both retail and wholesale customers in both residential and commercial industries, it is better suited to weather any broader downturns in the economy: even if housing and/or construction slows, it still provides products which are required for the most basic of construction needs. Moreover, its ever-growing distribution network (as... Read more