Q: Please compare risk and reward of RBA and TIH. Going forward, which stock do you think will provide the highest total return. Thank you
5i Research Answer:
Both TIH and RBA are classified as industrial names, but the industries they operate in couldn’t be more different. While RBA operates as an online auctioneer to buy and sell vehicles, its key competitor is CPRT, which is a great company. On the other hand, TIH is an equipment rental company. These are not apples-to-apples comparisons, and they are not direct competitors at all, we don’t see any issues owning both, and given their different risk/reward profiles.
Given where they are trading and their growth prospects, we think TIH may be a safer bet with an emphasis on downside protection. However, RBA may do better if the company can continue to integrate its recent acquisition.