Q: RBA stock is on a bit of a roll lately. Anything happened to change your view? Is it buyable at these levels, given a PE of 67? What would the forward PE be?
5i Research Answer:
Recent earnings were good, and historically it has been a very strong performer. Its forward P/E is OK at 27X, and analyst estimates have mostly been rising. It has a fairly levered balance sheet, but free cash flow generation is good and it pays a dividend of 1.1%. It has demonstrated good economic resilience and remained highly profitable across soft economic growth periods. We think it could see a minor pullback after its recent run in the past month, but overall we would be comfortable slowly averaging into the name.