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Reliance Worldwide (ASX:RWC) is a company that I like, and on the recent pull back in its share price due to the broader market reaction to the failure of SVB. I like it even more. Being in the building and construction space, they will experience the ups and downs of the construction industry as it inevitably cycles through its boom-and-bust phases.


Management has done the right things by shareholders and returned excess capital, and not issued excessive amounts of shares since listing in 2016. For a manufacturer/supplier in this space, they are conservatively geared with a 55% net-gearing ratio. They have stuck to their knitting and management has not decided to go off and buy a movie studio or start manufacturing EVs, or something daft like that.

RWC is involved in designing, manufacturing and supplying high quality, reliable and premium branded water flow, control and monitoring products and solutions for the plumbing and heating industry. They have expanded this offering in the USA through the acquisition of EZ-Flo. The jury is still out on this acquisition and time will tell if they got it right, but early signs are looking good!


The quality of RWC is starting to show in the face of a construction industry currently experiencing a downturn.


RWC’s stock ranking has increased by 11 over the last 30-days to 86, quality increased by 9, and momentum by 17 to 77. Furthermore, over the last 4-years RWC has basically maintained its super stock classification.


This is reflected in the overall quality of this Consumer Cyclical business.


RWC has increased sales revenue from $453m in FY17 to $1.1b in FY22. The increase in sales has resulted in higher profits. With profits growing from $49.9m to $137m over the same time period, with profits peaking at $141m in FY21.

However, in FY22 RWC’s profits and cashflow declined. This is mainly due to increased input costs (raw…

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