The RCG Corporation Ltd share price is running hard

RCG Corporation Ltd (ASX:RCG) shares could be cheap.

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The RCG Corporation Ltd (ASX: RCG) share price is up 11% to 81 cents today as bargain hunters buy up the stock after it was sold down to multi-year lows on a profit downgrade, weak retail sales data, and wages growth across Australia.

The stock is now up around 33% since the beginning of May when the operator of Hype DC, Platypus, Shubar and Athlete's Foot shoe stores revised its profit guidance down to between $74 million to $80 million in EBITDA for the full year ending June 30 2017.

RCG the retailer retains the exclusive distribution rights to 10 international footwear brands and over 400 retail stores. The company's directors also retain an ownership interest in around 30% of the shares on issue which means their interests are heavily aligned to the medium-term success of the business.

RCG Corp offers a trailing fully franked dividend yield of 7.4% on 12x trailing earnings, although it may face upcoming competition from online U.S. retail giant Amazon Inc. and European discount footwear retailers Decathalon and JD Sports.

Motley Fool contributor Tom Richardson owns shares of RCG Limited. You can find Tom on Twitter @tommyr345 The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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