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Your thoughts on RIC?

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Question asked 13/04/2024

Your thoughts on RIC?

RIC recently caught my eye with a fairly small ($30k) director on-market purchase. Another pro, the chart looks good to me. However, it appears their growth forward may be in question as the 24H1 report shows overall decreasing numbers. One final point I noticed is that the directors are taking some of their renumeration in stock. I have two questions. Firstly, what are your overall thoughts on RIC? Secondly, I noticed that directors receiving part of their remuneration in stock is fairly commonplace on the ASX - how do you view this? Thanks!

Answer

Hi Richard,

We actually like Ridley as a company (animal feed), we like director buying, and we like it when directors are incentivized through shares in the company, it creates better alignment. It is very prevalent in the US and works well there. RIC do have to produce a solid 2H to meet consensus with FY24 earnings expected to be flat on FY23 (~$42m), however better growth from FY25 is tipped, where is starts to look a little cheaper based on higher earnings. We think some reasonable upside for patient investors + a 5% yield seems attractive. A slow burn is how we would describe it.

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Ridley Corp (RIC)

LAST UPDATED 13/04/2024 08:41

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