Rona and Dorel Industries – Diamonds in the Rough?

One of the objectives of this blog is to point out investment ideas that make a lot of sense, at least to us. With over 2000 securities in our database, covering both US and Canada, seeing and writing investment ideas is not a difficult task. Remember these ideas are NOT recommendations. We are just highlighting different ideas, and it’s up to you and the community to make your own investment decisions.

(Hopefully, over time individuals from the model price community can share/alert other investors to their ideas, so the community can profit together – we will maintain the platform for the dialog and of course keep updating the model price charts – social media at its best!)

Here are a couple of Canadian companies that have caught our attention:

Rona Inc. (RON)

Rona Inc. with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

For those interested, a daily updated chart of RON subsequent to this post will be maintained on Facebook, here.

Rona, is a Canadian retailer and distributor of home improvement and gardening products. RON is trading with a potential upside of 104% to model price but also 39% discount to their book value. Obviously EBV-3, is support at the present time however if RON trades below EBV-3 for a period of time, of course we would be concerned.

Dorel Industries – Class B (DIIB)

Dorel Industries with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

For those interested, a daily updated chart of DIIB subsequent to this post will be maintained on Facebook, here.

Dorel Industries manufactures consumer products. (The Company’s products include a wide variety of ready-to-assemble furniture for home and office use.) We still are waiting for the December year-end balance sheet for the company. (Keep monitoring the Facebook site, to alert you on the update. [DIIB’s December balance sheet is now included on the Facebook chart.]) The company trades with a potential upside of 81% to model price and a 30% discount to book value.

Yes, the heat of the market currently resides with US technology stocks like Apple however in the deep freeze are stocks like Rona and Dorel that may offer even better risk reward characteristics to patient investors.

2 responses to “Rona and Dorel Industries – Diamonds in the Rough?

  1. Dorel March 17, 2012 at 3:22 pm

    It is obvious that you have put alot of effort into this! I thought I’d just leave a quick message saying good job!! Ah, thank you both, i’ve had a look and its an excellent resource.

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