Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Ritchie Bros. (NYSE:RBA) surged to a 10% gain in early trading today before settling into a gain near market close of roughly 8%. The company has had a good 24 hours, with market-beating earnings yesterday evening paired with this morning's announcement of a record haul from its latest auction in Fort Worth.
So what: Ritchie Bros. reported first-quarter revenue of $115.6 million, which resulted in earnings of $0.22 per share. The company's top line was up 17% year-over-year and beat Wall Street's $108.3 million consensus, while EPS was 65% higher year-over-year and well ahead of the consensus estimate of $0.15.
While Ritchie Bros. did not offer forward guidance, this morning's press release announcing a $50-million-plus haul from a single two-day auction in Fort Worth indicates a strong second quarter in the offing. This record haul came from the sale of more than 3,900 items, and this is just one of the dozens of auctions on Ritchie Bros.' calendar for the second quarter.
Now what: Ritchie Bros. might not seem cheap at a P/E of 32.5, but its $164.4 million in trailing-12-month free cash flow gives it a more reasonable price-to-free-cash-flow ratio of 18.1. So long as the economy remains strong, Ritchie Bros. is likely to benefit from a growing worldwide interest in its massive inventories of all manner of heavy equipment. Today might not be a great day to jump in after this 8% pop, but savvy dividend investors should certainly keep an eye on this stock.