Portfolio No 7.
Rent-A-Centre (RCII) is a US centric company with a proven and robust business model anticpating major ongoing growth. RCII is the largest group in the US offering consumer durables from electronics to furniture on a rentable and installment basis through nearly 2200 stores across the Nation and Canada.
It has beaten its Quartlerly forecasts for each of the last 4 quarters and is pushing for massive growth in the next quarter due out end July. It is rated an Alpha strong buy by Zachs and 10 by Fidelity, who quote 7 “Buy” analysts, 1 “outperform” and 1 “neutral”. By my standards RCII has a rich P/E at 36 and I wish it had a dividend. It is however steadily improving its forecast performance for the year from increased EPS and free cash flow to reduced debt.
The stock has marked time over the last month whilst the administration’s volatile China tactics have wobbled the market. Today it is up 1% at $23.70 having risen 48% from $16 at the start of the year.
This is a strong hold for long term growth.
The portfolio has slipped slightly over the past 4 weeks and is now showing a return for the year so far of 44%.
James is an advisor to the King Group wealth Management Team of Merril Lynch.