ADEN has more growth potential in the short-term hold due to the cyclicality of the business and potential for M&A activity to drive up the share price. RCH has been under pressure lately due to operational supply-side issues as well as demand related problems in its residential furniture and kitchen cabinet segments. RCH's management believes margin issues will resolve in the second half of the year as new distribution centers becom fully operational and existing inventory is sold off. If we were to buy one right now we would say ADEN for the short-term especially considering its cheap valuation at 9x froward earnings. We are however more comfortable with RCH long-term due to its solid operating history with many successful acquisitions, and if it can work through these operational issues it should perform well.
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