Richelieu Hardware (RCH-T)

It is high quality company and they have added it to the portfolio in the past 6 months. It has been weak because of the sector. They sell storage systems etc. and are very well managed. There is a big backlog in the home renovation sector. It is also buying back stock.

Thesis remains intact. High quality. Benefited during Covid renovations. Now stock's over-corrected. Usually trades at a premium. Now at an attractive multiple. Significant pullback gives a good margin of safety in the face of economic slowdown.

Has compounded 8x over 15 years. They make specialty hardware, growing organically and buying other distributors then adding product lines (i.e. kitchen cabinets). Just reported record profits. Stocks fell 25% last year when he bought it. Has fallen out of favour, because it is tied to housing, though sales are tied to home renovations through contractors (not hardware stores). Huge backlog for contractors and manufacturers for home renos. Very well-managed and strong balance sheet. Trades at 16x PE only. Have been buying back a lot of shares.

She doesn’t follow this closely. This is a home improvement stock. She sees the sector as more Amazon-proof than other types of retailers, so she expects companies like Richelieu to fare better. Richelieu has done OK but her interest has shifted from the Canadian market to the US. She owns Home Depot because she thinks the housing market is stronger in the US.

A very long term uptrend since 2011. A complete reversal of that trend has occurred this year. An attempt to rally in June failed, but has key support at $27. He does not see strong fundamentals at the moment. He would do a small speculative purchase, but expects $31 to be key resistance.

You never really hear about it. It has been around for a long time and it has done well. It is a phenomenally well run company. It trades at a lofty multiple but they do a good job of buying these small companies and doing well.