Hey all, I've recently taken a position in RRL. To me the stock appears very undervalued & unloved which is where the best returns come from. The business is trading at only 0.84x book & has an average price/book value multiple of 3x over the past 5yrs. The business if profitable & has great margins. The business has also produced roughly $100m p.a. in FCF over the past 4-5yrs & I expect FY22 figures to also be around this figure providing a 6.6% FCF yield. At my avg. cost of $1.78 I believe the stock should atleast be worth its tangible book value of $2.10 providing a 18% return to reach this price plus a 4% dividend yield providing an expected 22% return from today's valuation. I think the macro backdrop for gold produces is set up perfectly & given the strong balance sheet of RRL it is a low risk/high return bet. Catalysts: 1) - The McPhillay's approval announcement. 2) - Inflation 3) - Interest rate rise
RRL Price at posting:
$1.82 Sentiment: Buy Disclosure: Held
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