A year ago I wrote about RPC (https://mcturra2000.wordpress.com/2017/07/12/rpc-my-own-thoughts/), presenting a negative view. Since then, the shares have fallen 3.6% from 773p to 745p, whilst the ASX has risen 4.0% from c. 4025 to 4187.
What worried me was:
- a chart that seemed to be reversing
- debt that was too high for my liking
- mediocre ROCE
I guess I get to claim “victory” in my prediction, although it could easily have been wrong. I am just doing this write-up for completeness.
Reading the BBs (Bulletin Boards), the subject of acquisitions is mentioned quite a lot. analysts at Northern Trust thought that acquisitions were disguising structural problems. At the time, it said that it had completed 10 deals in 12 months. They said that the management had been encouraged to pursue value-destructive acquisitions, and had some of the most aggressive accounting they had seen.
Stockopedia gives it a quality score of 84, which is quire respectable. The StockRank is 81, also quite respectable. So perhaps I had been too negative in my original assessment. For my money, I am happy enough to be out of the share.
I’m not a footy fan, but good luck to England in the semis tonight. Is football coming home? We shall see. Stay safe out there.