Rocky Mountain Dealerships

RME-T

Analysis and Opinions about RME-T

Signal
Opinion
Expert
PAST TOP PICK
PAST TOP PICK
March 29, 2019
(A Top Pick Mar 01/18, Down 22%) This was disappointing. They were trying to grow at the expense of the bottomline. Their growth plans did not come to fruition. The CFO left. He does not see a lot of reason to be involved in this name at this point.
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(A Top Pick Mar 01/18, Down 22%) This was disappointing. They were trying to grow at the expense of the bottomline. Their growth plans did not come to fruition. The CFO left. He does not see a lot of reason to be involved in this name at this point.
PAST TOP PICK
PAST TOP PICK
January 11, 2019
(A Top Pick Nov 16/17, Down 27%) When he picked it the PE was 12 and a yield of 4%. The PE has dropped to 9 and the yield has risen to over 5%, but he is no longer excited about their strategy. He may buy back, but it is out of the portfolio.
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(A Top Pick Nov 16/17, Down 27%) When he picked it the PE was 12 and a yield of 4%. The PE has dropped to 9 and the yield has risen to over 5%, but he is no longer excited about their strategy. He may buy back, but it is out of the portfolio.
PAST TOP PICK
PAST TOP PICK
April 24, 2018

(A Past Top Pick on January 12, 2017, Up 29%) Last year was a great harvest and they've had good last few quarters, but the recent winter is a headwind--could be a slow start this year. It's still a cheap stock. Managment may acquire in the States; they have the cash. This could happen in the next 6-12 months and may be a catalyst for the stock to go up. Dividend yield of 3.7%.

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(A Past Top Pick on January 12, 2017, Up 29%) Last year was a great harvest and they've had good last few quarters, but the recent winter is a headwind--could be a slow start this year. It's still a cheap stock. Managment may acquire in the States; they have the cash. This could happen in the next 6-12 months and may be a catalyst for the stock to go up. Dividend yield of 3.7%.

TOP PICK
TOP PICK
March 1, 2018

He likes the insider buy in. 22% owned by insiders. 13% dividend growth over the last 5 years. Earnings momentum has been pretty good. They did not increase the dividend so they could look at opportunities. (Analysts’ target: $15.60).

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He likes the insider buy in. 22% owned by insiders. 13% dividend growth over the last 5 years. Earnings momentum has been pretty good. They did not increase the dividend so they could look at opportunities. (Analysts’ target: $15.60).

BUY
BUY
February 20, 2018

He thinks there is still good opportunity for the company. Sales are up 7%, earnings are up 23%, earnings estimates have gone up. The stock trades at a good multiple of EBITDA to Earnings Growth of 0.65. He sees this as similar to PEG, and considers anything less than 1 as good.

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He thinks there is still good opportunity for the company. Sales are up 7%, earnings are up 23%, earnings estimates have gone up. The stock trades at a good multiple of EBITDA to Earnings Growth of 0.65. He sees this as similar to PEG, and considers anything less than 1 as good.

PAST TOP PICK
PAST TOP PICK
January 8, 2018

(A Top Pick Jan 12/17, Up 44%) Case farm equipment. They picked up sales and the price moved up. If they continue to execute the way they have he will continue to hold it. They announced an acquisition in the US.

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(A Top Pick Jan 12/17, Up 44%) Case farm equipment. They picked up sales and the price moved up. If they continue to execute the way they have he will continue to hold it. They announced an acquisition in the US.

TOP PICK
TOP PICK
November 16, 2017

They had trouble a few years ago and sorted them out. They have a dividend as well. The industry is solid and stable and the company has turned around, solving their problems. He thinks there is upside to come. (Analysts’ target: $14.00).

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They had trouble a few years ago and sorted them out. They have a dividend as well. The industry is solid and stable and the company has turned around, solving their problems. He thinks there is upside to come. (Analysts’ target: $14.00).

TOP PICK
TOP PICK
November 15, 2017

Basically sells and leases agricultural and industrial equipment, particularly in Western Canada. Their next report will be March 2018, and earnings are expected to grow by 69%. 3.7% yield and 35% payout. Dividend yield of 3.7%. (Analysts’ price target is $14.)

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Basically sells and leases agricultural and industrial equipment, particularly in Western Canada. Their next report will be March 2018, and earnings are expected to grow by 69%. 3.7% yield and 35% payout. Dividend yield of 3.7%. (Analysts’ price target is $14.)

COMMENT
COMMENT
February 22, 2017

Had a Pairs trade with Service, and was Short it in the fall, largely because the company’s Q2 numbers were off the charts compared to the industry. It worked out well for him. As a Long position he thinks it is a good company, but if he had a choice, he would probably take Cervus (CERV-T).

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Had a Pairs trade with Service, and was Short it in the fall, largely because the company’s Q2 numbers were off the charts compared to the industry. It worked out well for him. As a Long position he thinks it is a good company, but if he had a choice, he would probably take Cervus (CERV-T).

TOP PICK
TOP PICK
January 12, 2017

This has really come off nicely from the lows of a few years ago. This coincides with the cyclicality of the oil price, and it is based in Alberta, but it is an agriculture company, so a lot of their sales decline and inventory problems that they’ve had over the last few years have come from a huge cycle of buying and inventory buildup that happened in the 2012-2014 period. We are starting to see signs of that rolling off. Last year was a very long harvest, so equipment might need to be replaced. Trading at about 8.5X earnings, 5X EBITDA. They do very accretive acquisitions, and the balance sheet is in reasonable shape. Dividend yield of 4.57%. (Analysts’ price target is $10.82.)

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This has really come off nicely from the lows of a few years ago. This coincides with the cyclicality of the oil price, and it is based in Alberta, but it is an agriculture company, so a lot of their sales decline and inventory problems that they’ve had over the last few years have come from a huge cycle of buying and inventory buildup that happened in the 2012-2014 period. We are starting to see signs of that rolling off. Last year was a very long harvest, so equipment might need to be replaced. Trading at about 8.5X earnings, 5X EBITDA. They do very accretive acquisitions, and the balance sheet is in reasonable shape. Dividend yield of 4.57%. (Analysts’ price target is $10.82.)

COMMENT
COMMENT
February 21, 2013

Acquiring equipment dealerships, mostly in Western Canada so this is exposure to the “resource” market. Bought a couple of dealerships in Manitoba to get exposure to the agricultural sector. Has done quite well and pays a good dividend. The one caution is that this market can slow down very quickly. Well-run firm.

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Acquiring equipment dealerships, mostly in Western Canada so this is exposure to the “resource” market. Bought a couple of dealerships in Manitoba to get exposure to the agricultural sector. Has done quite well and pays a good dividend. The one caution is that this market can slow down very quickly. Well-run firm.

BUY
BUY
August 17, 2011
Earnings are lumpy but return on capital has been quite strong. Should do well. Has not captured the excitement of the market. Would not be surprised if he owned it in a month.
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Earnings are lumpy but return on capital has been quite strong. Should do well. Has not captured the excitement of the market. Would not be surprised if he owned it in a month.
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