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Hey Community,
Anyone else have a position in RUL?
I actually invested in this originally at $2.19, so I’m quite happy with the recent growth.
Very interesting business!
It’s one of the business models I use to help businesses transition from Service-based businesses to product or productised-service businesses.
I’m keen to hear from others whether they think it’s heading.
The Rask analysis on it is spot on! so if anyone has another other commentary they’d like to add, I’d love to hear it!
Up0Well, if you ask Google Gemini about RULs competitive advantage its suggests the following:
Competitive Advantage Analysis of RPMGlobal Holdings (RUL)
RPMGlobal (RUL) operates in the mining industry, specifically providing software and consulting services. Here’s an analysis of their potential competitive advantages:Possible Moats:
Industry Expertise & Reputation: RUL has been around for over 30 years and boasts a strong reputation in the mining industry. This experience translates to deep domain knowledge and established relationships, making them a trusted partner for mining companies.
Software Specialization: RUL’s software focuses on critical aspects of mine planning and operations. A strong and well-regarded software suite can create a switching cost if it becomes integrated into a client’s core workflows.
Network Effects (Limited): While not as strong as in other industries, there could be some network effects. For instance, if RUL’s software becomes the standard in a particular mining niche, it could attract more users due to the availability of industry-specific data and expertise within the platform.
Other Competitive Advantages:Global Presence: RUL operates in multiple countries, offering a wider reach and potential client base compared to regional competitors.
Focus on Innovation: Investment in R&D allows RUL to stay ahead of the curve with new technologies and solutions for the evolving mining landscape.
Client Service: A focus on exceptional client service can foster loyalty and reduce churn.
Limitations to Consider:Competition: The mining software and consulting space is competitive, with established players and new entrants vying for market share.
Standardization: Standardization of mining software could diminish the value proposition of a specialized suite.
Economic Downturns: The mining industry is cyclical, and RUL’s performance can be impacted by economic fluctuations.
Overall Assessment:RUL appears to have a combination of intangible assets and strategic advantages that contribute to a competitive position. Their industry expertise, software specialization, and global reach create a strong foundation. However, maintaining this edge requires continuous innovation, excellent client service, and navigating a competitive landscape.
Further Research:
Analyze recent news and industry reports to understand trends in mining software and consulting.
Compare RUL’s software offerings and client base with major competitors.
Investigate RUL’s R&D investment and recent innovations.
By considering these factors, you can get a more comprehensive picture of RUL’s long-term competitive advantage.And the PDF attached is Microsoft Copilots take on whether RUL has a Moat. Co-pilot actually linked some references from Morningstar and an old review published in Intelligent Investor by Gaurav Sodhi
Up0Hi Geremy,
RPMGlobal is a business Owen covered in Rask 1.0, and also one that I have held personally since 2020 (for full disclosure).
In my opinion it’s one of the better expressions of getting exposure to the Aussie mining industry (via software & their advisory/consulting divisions), without getting into the far more capital intensive business models being a producer and/or an explorer.
It has grown its cashflows at a consistent clip, particularly as its transitioned its main software suites to a SaaS model, and then into cloud from perpetual licenses.
I’d keep my eye on Total Contract Value’s (TCV) growth – which are RPM’s non-cancellable, pre-contracted software subscription revenue and also how the numbers track outside of Australia too.
On a more wary tone, I’d also lookout for management incentive costs. CEO Richard Matthews does have heaps of skin in the game, and has also done an amazing job driving this business as a non-founder, but while great teams and performance should be rewarded, these are still very real costs.
Hope these points help!
-Kev
Disclosure: Kevin owns shares of RPMGlobal and will continue to hold.
ps. another side note, hopefully RPM doesn’t follow the recent path of smaller Aussie companies being taken private. Almost all of RPM’s primary competitors aren’t publically listed anymore, and it would be sad to see RPM go down a similar road.
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