Morningstar Rating

Stock Research and Analysis

by Kwame Webb, CFA

Bulls Say

More than 50% of bids come from Ritchie Bros.' online channels, and show that the company can be successful against online upstarts like IronPlanet and Proxybid.
The firm has historically generated strong ROICs, and this metric should improve as capital spending needs fall over the next few years.
The average age of equipment coming to auction is finally starting to decline and this should translate into larger average auction lots and higher average revenue per auction lot going forward. Read more 

Bears Say

Despite its online leadership in the auction industry many of Ritchie Bros.' systems are outdated and require manual overrides. An anticipated multiyear investment cycle could weigh on free cash flow and present systems implementation risks.
A recent slowdown in the Canadian economy will weigh on the 25% of Ritchie Bros. revenue coming from the region.
The at-risk business makes up one third of total auction proceeds and management would like to increase this figure. If the business-line expansion is mismanaged it could erode profitability. Read more 

Management

Our stewardship rating for Ritchie Bros. is Standard. Until 2014, CEO Peter Blake led Ritchie for more than 20 years, successfully generating strong ROICs and operating income growth. Blake’s asset growth strategy stumbled over the 2009 through 2014   Read more 

Profile

With more than 44 auction sites, Ritchie Bros. Auctioneers is the world's largest auctioneer of industrial and agricultural equipment. The company focuses on unreserved   Read more 

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