Reece (REH) is a leading Australian plumbing and bathroom supplies company with a growing international presence, supplying trade professionals and consumers across Australia, New Zealand and the United States, where it now generates ~57% of its revenue. The company beat the market’s low expectations last month while delivering a cautious/prudent message moving forward – covered Here. REH is controlled by the Wilson family, who own nearly ~70% of the business through various entities, with CEO Peter Wilson part of the dynasty, i.e. plenty of skin in the game, which MM always likes.
We believe green shoots are forming for REH, although the latest RBA rate hike and subdued US housing activity are both creating headwinds. However, we are conscious that opportunities are often formed when things still appear weak – markets price the future.
- We like REH as a recovery story moving forward with the stock trading ~20% below its average 5-year EV/EBITDA multiple.
MM is bullish towards REH around $15
Add To Hit List
