Ritchie Brothers: World’s Largest Industrial Auctioneer

Chris Crawford presented his in-depth investment thesis on Ritchie Brothers (NYSE: RBA) at Best Ideas 2016.

Ritchie Brothers was founded in 1958. With more than 1400 employees and 44 auction sites across 19 countries, the company is the world’s largest auctioneer of industrial and agricultural equipment. Key end markets are construction, transportation, materials handling, oil & gas, forestry, mining, and agriculture. The company focuses on unreserved public auctions, where a product sells to the highest bidder regardless of the price. In 2014, the firm generated $481 million in revenue and $4.2 billion in gross auction proceeds. Ancillary services include reserve-based auctions, refurbishment, storage, appraisal, insurance, and financing. RBA is a high-quality business with high margins, scale advantages, network effects, and strong barriers to competition. RBA has strong prospects to continue gaining market share within the large and fragmented global equipment auction market. Despite the history of consistent top-line growth and high profitability, the company has been under-managed from a capital efficiency perspective. Chris believes a new CEO and key executives who came in 2014 are pursuing a credible strategy to improve operational and capital efficiency, which could be an important catalyst to create and unlock value as well as inspire market recognition. With current fears over a global industrial recession, the stock has traded down to the low end of its historical valuation range on a variety of metrics.

About the instructor:

Chris Crawford is the Managing Partner and Chief Investment Officer of Crawford Fund Management, LLC, a Boston-based Registered Investment Advisor. The firm manages a long/short fund that invests in equities and options with an emphasis on underfollowed public companies. Prior to co-founding Crawford Fund Management in 2009, Chris was Managing Director, Portfolio Manager and head of the Boston office with Stark Investments, a $10B multi-strategy global hedge fund. At Stark, Chris built the firm’s equity long/short team and managed $1.5B in equity long/short assets as well as a $200M short-biased portfolio. From 2003-2006, Chris was Senior Vice President and Portfolio Manager with Putnam Investments, and co-Portfolio Manager of the $3B Putnam International Capital Opportunities Fund and related client accounts. From 2000 to 2003, Chris was a Partner and Senior Analyst with ABRY Partners on a team managing a $400M TMT-focused hedge fund. From 1996 to 2000, Chris was with Wellington Management Company, where he served as a Global Industry Analyst covering the media industry and as a Portfolio Manager for $600M in client sector-fund and institutional assets. Chris holds an MBA from The Wharton School of Business and graduated magna cum laude from University of Pennsylvania with a BA in Physics, BS in Economics, BAS in Systems Engineering and an MA in International Relations.

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