the train is leaving the station, page-4

It is amazing that more shares have not hit the sell side of the ledger given the price increase. If directors keep buying, the free float of this company will be non-existent.

I was looking at GXL, IVC and GEM over the weekend as I expect RNC to adopt a similar growth by acquisition model. It is very interesting to go back 5+ years and find the inflection point for each of these companies and how they managed their growth over the years. I highly recommend this exercise to holders and potential holders despite the drawbacks of hindsight.

It is way too early to make a call that RNC will be the next GXL, GEM or IVC but I certainly believe RNC have created a business model/processes that can easily be replicated within a fragmented industry.

I expect mgmt to secure the low hanging fruit (organic growth) over the next 12 months and then embark on a growth by acquisition strategy. The experience of having their hands tied with debt should ensure a cautious approach.

If my interpretation of the Macquarie industry report is correct a large number of property mgmt agencies are run by sole proprietors who are looking to sell, but through staged acquisitions. This is a great way of ensuring continuity of the RMA's (lower risk) and staff. It also spreads the funding over a few years contingent on performance (again, lower risk).

At 29c, I no longer believe RNC is cheap based on past performance. Buyers at current levels are already paying for anticipated growth, IMO. There is a risk that the Dec HY results will disappoint due to the additional staff, office renos and software roll outs.

That said, I won't be selling any of my shares. I want to see how this plays out over the coming years. 29c may well be seen as an incredible bargain.