TopPicks from Stephen Takacsy, president, chief executive officer and chief investment officer, Lester Asset Management
Stephen Takacsy, president, CEO and chief investment officer at Lester Asset Management, discusses his top picks: Richelieu Hardware, Pet Valu, and Flagship Communities.Richelieu is a leading North American distributor and manufacturer of specialty hardware for kitchens, bathroom cabinets and storage closets. It has grown organically and by acquisition. Recently it reported record sales of $1.8 billion as well as record profits.
Richelieu’s sales are mostly tied to the home renovation market through manufacturers and contractors who are still backlogged from the pandemic demand and supply chain issues. So, despite a slowdown in housing prices, there is still huge pent-up demand in the home renovation market. The company is extremely well managed, has a very strong balance sheet and now has a compelling valuation with a P/E of around 16X 2023 and the company has been aggressively buying back shares at these levels.
The pet supply business is also a recession-resilient business. Since Pet Valu’s initial public offering in 2021, it has consistently beaten consensus, delivered double-digit organic growth and raised its guidance. It keeps rolling out new stores to gain more market share and recently acquired the largest pet supply retailer in Quebec. The company is trading at around 23X NTM P/E which is reasonable given its growth rate.Owns over 60 manufactured housing communities in the U.S. Midwest.
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