Richelieu Hardware Ltd. (TSX: RCH) - Swing Trade💰 RCH.TO — Swing Trade Breakdown (November 2025)
🏢 Company Snapshot
Richelieu Hardware Ltd. (TSX: RCH) is a Canadian importer, manufacturer, and distributor of specialty hardware and renovation supplies. It serves cabinetmakers, furniture builders, and DIY markets. The stock has been gaining attention for its steady fundamentals, clean chart structure, and possible upside if margins recover.
📊 Fundamentals
P/E: ~24.3× — Slightly above industry average (15-20×), showing investor confidence.
P/B: ~2.1× — Moderate valuation relative to peers.
Debt/Equity: ~0.28 — Low leverage and conservative balance sheet.
ROE: ~6.3% — Profitability still lagging high-quality peers.
Dividend Yield: ~1.65% — Balanced between growth and income.
Free Cash Flow: ~CAD 145 M TTM — Strong liquidity generation.
Cash on Hand: ~CAD 45–50 M — Solid short-term flexibility.
🧾 Summary: Healthy balance sheet, modest valuation, but needs stronger profitability to re-rate higher.
📈 Trends & Catalysts
Revenue Growth: +6.6% YoY to ~CAD 1.93 B — steady expansion.
EPS Trend: Slightly down (~-5% YoY) to ~CAD 1.53 TTM.
Cash Flow: Improving; strong FCF helps reinvestment and dividends.
Balance Sheet: Low leverage, improving liquidity metrics.
Catalysts:
Margin rebound potential if supply costs ease.
Renovation and housing activity supporting demand.
Quarterly earnings or guidance upgrade could trigger upside.
Risks:
Margin compression from materials and freight.
Slowing home improvement cycle.
Modest ROE limits institutional interest.
🪙 Industry Overview
Weekly: Up ~1-3% — mild momentum into renovation plays.
Monthly: Up ~5-8% — sector rotation favouring construction and housing.
12-Month: Outperforming broader materials group as defensive industrial supplier.
📐 Technicals
Price: ~CAD 36.93
50-SMA: ~CAD 36 → price trading above this level, confirming uptrend.
200-SMA: ~CAD 32.00 → long-term bullish structure intact.
RSI(2): ~9.76 → short-term oversold region, potential for mean reversion.
Pattern: Bullish flag forming after breakout.
Support: CAD 35.00 – 36.00 zone.
Resistance: CAD 40.50 – 41.50 zone.
Volume: Building on green days — accumulation phase likely starting.
🎯 Trade Plan
Entry Zone: CAD 37.00 – 38.00 near breakout retest or low-volume pullback.
Stop Loss: CAD 34.75 (below support).
Target: CAD 41.50 (prior highs).
Risk/Reward: ~2.5× setup — clean structure with manageable downside.
Alternate Entry: Breakout confirmation above CAD 39.00 on heavy volume.
🧠 My Take
RCH.TO looks like a solid medium-beta swing candidate: low debt, steady cash flow, and constructive technicals. Momentum is quietly building, and the chart shows a flag continuation pattern right above key moving averages.
I’m watching for a breakout through 39.00 to confirm momentum into the 41.50 resistance zone. Ideal risk entry remains in the 37-38 area with stops below 34.75.
📈 Bias: Bullish consolidation — targeting 8-10% swing upside over 1–3 weeks.
