"Ritchie Brothers hosts auctions and earns fees based mainly on the sale prices achieved at those auctions. RBA owns a total of 38 auction sites in 27 countries and allows bidders to bid on equipment at auction over its website as well.

"With global manufacturers already maximizing production, the market for second-hand equipment is booming. In many cases, buying used mining and farming equipment can be a far cheaper and more expedient means of getting much-needed equipment.

"The high demand for equipment has pushed up prices and increased the number of firms looking to buy used industrial and agricultural machines. Since RBA is paid based on the value of products sold at its auctions, this spells steady growth in fee revenues.

"In addition, RBA is actually benefiting from the slowdown in the U.S. property market. Specifically, homebuilders and construction firms in the U.S., facing a slowdown, now have plenty of surplus construction and earth-moving equipment left over from the recent property boom.

"Some smaller players are also looking to raise cash to shore up finances and selling surplus equipment is an easy way to earn some quick cash.

"Meanwhile, property and construction markets are still booming in places like the Middle East and Asia. Builders in these markets are more than happy to snap up surplus used equipment in the U.S. RBA has buyers in 170 countries and recently opened up sites in Dubai and Singapore to capitalize on demand from the Middle East and Asia respectively.

"The company estimates that it has close to 80,000 registered buyers in 170 countries worldwide and has a total of 38 auction sites around the world. RBA also has plans to open up two to three new auction sites each year, mainly in fast-growing foreign locations.

"RBA trades at 26 times next year's earnings estimates and has a long term projected growth rate of around 18%. That means that RBA trades at roughly 1.45 times its long-term earnings growth rate.

"That's not overly expensive for a firm with a market-leading position such as RBA. And RBA has actually been growing at closer to 21% annualized over the past five years, thanks to the strong growth drivers in the industrial, mining and agriculture businesses. Therefore, that 18% long-term projected growth rate looks like conservative estimate.

"And we see RBA continuing to grow faster than the auction market in general. While RBA is the largest auctioneer in its niche, management estimates that the market for used industrial equipment is about $100 billion annually and RBA only controls 3% of that market.

"Much of that $100 billion in equipment is still sold privately; often sellers don't realize the full potential value of their equipment in private sales. RBA has room to grow by simply grabbing more of its existing market over time.

"RBA is a play on the growth in the mining, agriculture and global construction businesses. As the largest competitor in its field, RBA is well-positioned to benefit from strong demand and price increases for used industrial, mining agricultural equipment. With this in mind, RBA is a solid 'Buy'."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.