RWC is a supplier of plumbing parts making it dependent on the building industry for growth and profitability, we didn’t mind the Augusts result which showed net sales of $US1.17bn but the market slammed the stock due to a lack of certainty from management around what comes next. The good news for investors is we believe that RWC’s focus on repairs should position it better than many rivals through an economic downturn.
So far RWC have been able to pass on most cost increases to customers after the costs of key materials including copper, zinc, steel, freight and energy have risen sharply.
- We like RWC around the $3.50 area initially looking for ~25% upside.
MM is bullish RWC at current levels
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