Rocky Mountain Dealerships

Rocky Mountain Dealerships  -  RME  .  TSX

This is what I thought in November 2015 when I first bought the stock...

Rocky Mountain owns and operates a chain of farm equipment dealerships in western Canada. This industry has apparently been through a dry spell over the last few years. Earnings slumped this year and there is some excess inventory that needs to be worked through, but the most recent third quarter results were strong and bode well for a recovery in the years ahead. The stock is quite inexpensive with a trailing p:e ratio of 8.6 at my recent purchase price of $6.58. Historically, this has been a strong performer through all the phases of the business cycle as their results are affected more by weather patterns than by economic activity. People can put off buying the latest iGadget but they are always going to want food on their plates come suppertime. Right now, that sort of more defensive play is looking attractive. And at a trailing p:e under 9 and a p:b under 1, you don’t seem to be paying a significant premium for this sort of stability.

What's changed since I made my first purchase of this stock? Follow the ongoing story in the posts below...

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