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Ritchie Bros. Auctioneers (NYSE:RBA)

CA7677441056

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Ritchie Bros. Auctioneers stock research in summary

rbauction.com

ANALYSIS: With an Obermatt Combined Rank of 73 (better than 73% compared with investment alternatives), Ritchie Bros. Auctioneers (Diversified Support Services, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Ritchie Bros. Auctioneers are a good value (attractively priced) with a consolidated Value Rank of 71 (better than 71% of alternatives), are safely financed (Safety Rank of 65, which means low debt burdens), but show below-average growth (Growth Rank of 37). ...read more

RECOMMENDATION: A Combined Rank of 73, is a buy recommendation based on Ritchie Bros. Auctioneers's financial characteristics. As the company Ritchie Bros. Auctioneers's key financial metrics exhibit good value (Obermatt Value Rank of 71) but low growth (Obermatt Growth Rank of 37) while being safely financed (Obermatt Safety Rank of 65), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 71% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	71
Growth Rank	37
Safety Rank	65
Combined Rank	73

Country	Canada
Industry	Diversified Support Services
Index	TSX Composite
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Ritchie Bros. Auctioneers

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	40	27	57	71
GROWTH
GROWTH	52	95	75	37
SAFETY
SAFETY	23	54	62	65
SENTIMENT
SENTIMENT	n/a	61	49	^new
360° VIEW
360° VIEW	n/a	81	77	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Ritchie Bros. Auctioneers is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	40	27	57	71
GROWTH
GROWTH	52	95	75	37
SAFETY
SAFETY	23	54	62	65
COMBINED
COMBINED	17	65	79	73

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Ritchie Bros. Auctioneers the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 71 (better than 71% compared with alternatives), Ritchie Bros. Auctioneers shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Ritchie Bros. Auctioneers. Price-to-Profit (also referred to as price-earnings, P/E) is 62 which means that the stock price compared with what market professionals expect for future profits is lower than for 62% of comparable companies, indicating a good value concerning Ritchie Bros. Auctioneers's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 44, which means that the stock price is lower as regards to invested capital than for 44% of comparable investments. On the other hand, Price-to-Sales is less favorable than 67% of alternatives (only 33% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 7% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 71, is a buy recommendation based on Ritchie Bros. Auctioneers's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	40	17	25	33
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	39	33	45	62
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	29	20	54	44
DIVIDEND YIELD
DIVIDEND YIELD	76	76	77	93
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	40	27	57	71

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Ritchie Bros. Auctioneers; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Ritchie Bros. Auctioneers shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Ritchie Bros. Auctioneers. Profit Growth has a rank of 56, which means that currently professionals expect the company to grow its profits more than 56% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 73 (above 73% of alternative investments). But Sales Growth has a below the median rank of 29, which means that, currently, professionals expect the company to grow less than 71% of its competitors, and Capital Growth also has a lower rank of 21. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Ritchie Bros. Auctioneers. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	55	90	94	29
PROFIT GROWTH
PROFIT GROWTH	19	43	91	56
CAPITAL GROWTH
CAPITAL GROWTH	n/a	95	20	21
STOCK RETURNS
STOCK RETURNS	45	53	53	73
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	52	95	75	37

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Ritchie Bros. Auctioneers.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 65 (better than 65% compared with alternatives), the company Ritchie Bros. Auctioneers has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Ritchie Bros. Auctioneers is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Ritchie Bros. Auctioneers. Liquidity is at 80, meaning the company generates more profit to service its debt than 80% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 34, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 66% of its competitors. Leverage is also high at a rank of 44, which means that the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 65 (better than 65% compared with alternatives), Ritchie Bros. Auctioneers has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	31	64	74	44
REFINANCING
REFINANCING	33	28	34	34
LIQUIDITY
LIQUIDITY	61	72	65	80
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	23	54	62	65

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Ritchie Bros. Auctioneers and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	5	85	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	72	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	97	29	^new
MARKET PULSE
MARKET PULSE	n/a	40	35	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	61	49	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Ritchie Bros. Auctioneers.
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