Guest hellsten Posted October 11, 2013 Share Posted October 11, 2013 This seems like a great business and is at a 52-week low. I don't have any insights into how good an investment this company is, but I remember reading about them in Sequoia's letter: http://www.sequoiafund.com/Reports/Transcript13.pdf Question: My question is about Ritchie Brothers. It is a great company and had a great run from 2001 to 2009. It expanded from 27 to 40 auction sites, but it is not growing like that today. It has new competition from companies like Iron Planet and CAT Auctions. I think Ritchie, the biggest shareholder, sold several million of his shares earlier this year. I am wondering what your view is on it going forward. David Poppe: Ritchie Brothers is a terrific company. Management was clearly overconfident in 2007 − 2008 and the business was more dependent on the US housing bubble than its management or we realized. Ritchie Brothers is an auctioneer. It sells industrial and construction equipment. It is a really good model. Ritchie built 45 permanent auction sites around the world, a good bit of them in North America. Contractors tend to go from job to job and they win bids on different jobs that require different equipment. Ritchie gives them a really good way to manage their fleets by buying and selling equipment as they need it. It also turns out because management runs the company very well — it tends to be a good proposition for sellers because you tap into a world market or at least a North American market when you try to sell a piece of equipment as opposed to taking it to your CAT dealer or your Komatsu dealer. Those dealers really are supposed to sell in a prescribed geography. So Ritchie reaches a bigger market of potential buyers. Within two to three weeks of putting a piece of machinery in an auction you can get cash for it — some of these are $200,000 − $300,000 items. They are not easy to sell. It is not that liquid a market. Obviously, Ritchie is very exposed to the US construction market. And the company over-expanded before the housing downturn; so now it is stuck with sites that are operating far below capacity. If the US housing market recovers, Ritchie Brothers will do very well. If the US housing market does not recover, Ritchie Brothers will muddle along. That is how we look at it at this point. Dave Ritchie’s sale — I am a little sympathetic to him. He is 77 years old, and I do not think he and his wife are in very good health. I think he chose to exit the business and focus on his personal situation. Morningstar also likes RBA: With its enviable position as the largest seller of construction equipment, we think Ritchie Bros. Auctioneers will deliver impressive results during the next decade regardless of the strength of any economic recovery. Seems like a great company, but not necessarily cheap. RBA is definitely not a cigar butt… Link to comment Share on other sites More sharing options...
Phaceliacapital Posted October 11, 2013 Share Posted October 11, 2013 Good business but near to fairly valued... Link to comment Share on other sites More sharing options...
alpha231616967560 Posted October 11, 2013 Share Posted October 11, 2013 I think that this is one of those businesses that Warren and Charlie are referring to when they thank their lucky stars for paying up for the right business. They are one of those very few businesses / business models that benefit from a bonafide network effect, and they are just figuring out that the internet will help them grow immensely. I will be reading the last few years annual reports this weekend. The net profit margin seems to have slipped pretty significantly in recent years. Does anyone know why right offhand? Thanks for the tickler (I've been meaning to do my DD on this company for months now). Link to comment Share on other sites More sharing options...
OracleofCarolina Posted February 14, 2014 Share Posted February 14, 2014 http://www.sec.gov/Archives/edgar/data/1568820/000139834414001024/xslForm13F_X01/fp0009517_13fhr-table.xml Arlington Value added this position in the 4th quarter Link to comment Share on other sites More sharing options...
stahleyp Posted February 15, 2014 Share Posted February 15, 2014 why isn't SEQUX's 13f out (Ruane, Cunniff and Goldfarb)? Link to comment Share on other sites More sharing options...
CorpRaider Posted February 15, 2014 Share Posted February 15, 2014 I looked at this one recently it is interesting. One thought I kept having was why I shouldn't just buy BID. Link to comment Share on other sites More sharing options...
LC Posted February 15, 2014 Share Posted February 15, 2014 why isn't SEQUX's 13f out (Ruane, Cunniff and Goldfarb)? don;t they have until the 15th? so monday? Link to comment Share on other sites More sharing options...
Valueguy134 Posted February 15, 2014 Share Posted February 15, 2014 I liked these guys when I was researching RME. Ended up getting RME since Ritchie was close to fairly valued. Link to comment Share on other sites More sharing options...
stahleyp Posted February 15, 2014 Share Posted February 15, 2014 why isn't SEQUX's 13f out (Ruane, Cunniff and Goldfarb)? don;t they have until the 15th? so monday? I thought it was the 14th but I could be wrong. Link to comment Share on other sites More sharing options...
Picasso Posted September 10, 2014 Share Posted September 10, 2014 Has anyone thought about the likelihood or feasibility of a takeout of RBA by a CAT or equipment maker? The time I spent looking into the stock had me thinking more about the moat around the no reserve auction business as well as the counter cyclical business model. Seems like something that would be important to someone like CAT. It would take them forever to try and compete effectively with RBA. I mention it since I think this is one of those great long-term compounders, but I would like to figure out my odds of getting taken out of the position from an acquisition. Link to comment Share on other sites More sharing options...
BPCAP Posted September 17, 2014 Share Posted September 17, 2014 Anyone got an opinion on management or the new CEO? Link to comment Share on other sites More sharing options...
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