RWC - Reliance Worldwide Corporation

[System]

Reliance Worldwide Corporation is a global provider of water control systems and plumbing solutions for domestic, commercial and industrial applications. Reliance Worldwide Australia is headquartered in Brisbane, and has nationwide presence with operations in Melbourne, Sydney and Perth.

It is anticipated that RWC will list on the ASX on 29 April 2016.

http://www.rwc.com

 

[mcgrath111]

Starting to have a look at RWC, particularly after HY results were released.
Earnings increasing, debt decreasing and a div being announced. I've also recently seen CGF (Who I keep a keen eye on to see what they're buying selling) and MAQ jumping on board.
Interested to see others thoughts in the company.
On a lazy note, I believe the PE to be around low 20's, which strikes me as pricey and I'm more of a bargain hunter by nature.
That being said the business seems to be solid and appears to have a competitve ad

 

[greggles]

Nice gap up for Reliance Worldwide Corporation today.

They announced this morning that they have completed an Institutional Entitlement Offer that raised approximately $946 million at the offer price of $4.15 per new ordinary share, which will be used to partly fund the acquisition of John Guest Holdings Limited.

RWC is currently trading at $5.39, up 18.20% on Friday's close.

 

[peter2]

At new yearly highs and the monthly/weekly up trends are strong.

 

[bigdog]

Today bad news reported by Motley

Why the Reliance Worldwide share price crashed 26% lower today

James Mickleboro
Motley Fool 13 May 2019

It has been a disappointing start to the week for the Reliance Worldwide Corporation Ltd (ASX: RWC) share price.

In morning trade the plumbing parts company’s shares are down a whopping 26% to $3.40.

Why is the Reliance Worldwide share price sinking lower?
This morning Reliance Worldwide released a trading update and revised its guidance for FY 2019. As you might have guessed from the share price reaction, it wasn’t a positive revision.

According to the release, the company’s operating segments have been affected by market‐specific factors which are negatively impacting their performance and results.

This has led to management downgrading its full year EBITDA guidance from between $280 million and $290 million to between $260 million and $270 million.

What happened?
Whilst the company’s Americas business continues to achieve good underlying growth, two issues have restrained net sales in the second half of FY 2019.

One is the lack of a modest freeze event in the region. A modest freeze event is considered to be the average level occurrence of winter storms over a sustained period across the USA, causing cracked or broken pipes.

The company will usually benefit more from freeze events occurring in the southern parts of the USA than in the north‐east or mid‐west. This is because water pipes are generally not as well insulated in the south, which means a freeze event can cause these pipes to break.

Management estimates that the lack of a modest freeze event has reduced net sales by the order of $12 million to $15 million in FY 2019.

In addition to this, a number of its channel partners have pursued strategies in the second half of the financial year to actively reduce inventory on hand. As a result, net sales in this half are lower than expected, particularly in the Retail channel.

Management believes this is a timing issue due to these inventory strategies rather than a fundamental demand issue.

In the EMEA segment the company’s John Guest business is performing to expectations, but its core Reliance Worldwide businesses in the UK and Spain have not met expectation. This is largely due to a decision by management to exit certain product lines previously sold.

And finally, the APAC segment has also fallen short of expectations as a result of a sharper than forecast decline in new home construction in Australia.

Despite this disappointing performance, management continues to be pleased with how the business is positioned, its current trajectory, and the underlying performance across our core products and geographies.

 

[So_Cynical]

Impressive video, hard to like anything to do with construction at the moment, i will add this to a watchlist for later.
~

 

[Smurf1976]

Impressive video, hard to like anything to do with construction at the moment

Agreed although I'll add that there's also an essential maintenance aspect to some of the company's products.

If a TPR valve goes well then it's either replace the valve or have cold showers until you do so there's an element to the business that's in maintenance as well as the construction aspect of sales.

 

[peter2]

The RWC price chart is starting to look more bullish as price is now at resistance. Mgt did mention that the recent poor results were due to circumstances outside their control (no freeze event and inventory reduction by suppliers) and that there's no fundamental issues with the business. A cold winter in the US will make the shareholders happier.
Note: The REH price chart is also looking bullish.

For those of you who like more TA observations;
Daily chart (on the right);
RSC (XAO) on the top pane shows that RWC has been going up faster than the XAO index over the past few weeks (= someone's buying).
TMF bottom pane: Above its zero line even when the price was going down (= someone's been accumulating RWC over the past three months).

 

[So_Cynical]

Has traded at $4 plus over the last couple of months, a nice bounce off the August lows of around $3.20, could go higher as the northern winter kicks off.

 

[peter2]

Weather is obeying time honored seasonal pattern called "winter".
Bullish up bar on RWC today.

 

[Trav.]

RWC down today a whopping 26.5%

I think that this section of the announcement triggered to collapse, is this an over reaction? Any fundamental guys care to comment?

 

[peter2]

Didn't see that coming.

 

[So_Cynical]

I saw the drop and then went over the announcements and im like - WTF.

The numbers were good all things considered, the outlook was negative and that has to be to
blame for the 26% fall, i'm guessing that people dont build houses or renovate in a pandemic?

 

[mcgrath111]

I saw the drop and then went over the announcements and im like - WTF.

The numbers were good all things considered, the outlook was negative and that has to be to
blame for the 26% fall, i'm guessing that people dont build houses or renovate in a pandemic?

The impact on the housing market is a big unknown...well everything is at the moment!

I really like RWC, I wanted to buy in at 2.80 a few years back, but it never hit and went like a rocket.

I think next month, I might have a dip...hoping for $1.40-1.50. Although, even now it's looking very tempting, it's a great company!

 

[Trav.]

RWC trending sideways at the moment and $2.8 appears to be the resistance level.

Some signs of life shown on Friday with a high of $2.59 before closing at $2.51

There was an announcement on the 1/5 re Executives and Directors taking a temporary reduction in salary and fees due to COVID-19 plus some operation scale back

- In Australia, we have decided to scale back manufacturing operations from 5 days a week to 4 days
a week, commencing the week of 11 May 2020. Customer service and warehouse activities will
continue to operate on a 5 day per week basis

https://newswire.iguana2.com/af5f4d73c1a54a33/rwc.asx/3A540469/RWC_Update_on_operations​

holding for the time being

 

[Boggo]

I got caught with a few stock in my SMSF that jumped the stop on their way down.

RWC was the worst of those but I have been seeing some positive behaviour lately.

(click to expand)

 

[Trav.]

@Boggo what are your thoughts about RWC (Short / Medium term ) as it appears to be trending up nicely this week and heading for some resistance @ $2.80

Daily volume is low and all indicators looking good to me.

Any thoughts appreciated.

Cheers

 

[Boggo]

@Boggo what are your thoughts about RWC (Short / Medium term ) as it appears to be trending up nicely this week and heading for some resistance @ $2.80

Daily volume is low and all indicators looking good to me.

Any thoughts appreciated.

Cheers

Just a quick look at the weekly up to yesterdays data, went a bit higher today.

Will have a better look over the weekend but at the moment on the weekly it's through the first potential hurdle, next one may be around the $3.10 area.

I'm sure you are well aware that there are a lot of new influences on the markets in the current environment that can throw both fundamental and technical guides out the window.

(click to expand)

 

[Trav.]

@Boggo appreciate your response just interested in a alternate view as I can get a bit of tunnel vision some times.

 

[Trav.]

Another good day for RWC and closed at the $3 mark ( high of 3.01 ). It powered through $2.80 and resistance drawn at $3.12 where the small gap occurred (3.12 to 3.20). Holding