{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "RELL",
  "name": "Richardson Electronics, Ltd.",
  "url": "https://frontierpicks.com/dossiers/RELL/",
  "json_url": "https://frontierpicks.com/dossiers/RELL.json",
  "status": "DORMANT",
  "current_conviction": "MEDIUM",
  "archetype": {
    "code": "a4",
    "n": 4
  },
  "current_thesis": "Richardson Electronics is turning a record $184.4 million backlog into 18.9% sales growth and wider margins, and the shares recovered to $19.43 after an unexplained 15.44% drop. The fiscal Q2 report, expected around 7 January 2027, shows whether margins hold without a one-time tariff refund.",
  "invalidation_trigger": "A daily close below $16.40, under the 2026-11-05 close that followed a 15.44% one-day drop. A second break would be fiscal Q2 backlog below the $164.4 million fiscal year-end level, or gross margin at or below 31.0%.",
  "catalyst_date": null,
  "portfolio": null,
  "pick": null,
  "themes": [
    "industrial-power-grid",
    "semi-foundry-equipment"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "Richardson Electronics (RELL) Stock Price & Overview",
      "url": "https://stockanalysis.com/stocks/rell/",
      "date": null
    },
    {
      "title": "A header correction leaves Richardson Electronics (RELL)'s Q1 FY2027 results unchanged.",
      "url": "https://www.stocktitan.net/sec-filings/RELL/8-k-a-richardson-electronics-ltd-amends-material-event-report-e929630b8b44.html",
      "date": "2026-10-08"
    },
    {
      "title": "Richardson Electronics posts $6.4M profit in 2026",
      "url": "https://www.stocktitan.net/sec-filings/RELL/10-k-richardson-electronics-ltd-files-annual-report-c03edeb7cb38.html",
      "date": null
    },
    {
      "title": "Richardson Electronics To Go Ex-Dividend On November 6th, 2026 With 0.06 USD Dividend Per Share",
      "url": "https://news.futunn.com/en/post/1000749932/richardson-electronics-to-go-ex-dividend-on-november-6th-2026",
      "date": null
    },
    {
      "title": "Insider Selling: Richardson Electronics (NASDAQ:RELL) CFO Sells $105,050.00 in Stock",
      "url": "https://www.defenseworld.net/2026/11/02/insider-selling-richardson-electronics-nasdaqrell-cfo-sells-105050-00-in-stock.html",
      "date": "2026-11-02"
    },
    {
      "title": "Insider Selling: Richardson Electronics (NASDAQ:RELL) Director Sells 1,000 Shares of Company Stock",
      "url": "https://www.marketbeat.com/instant-alerts/insider-insider-selling-richardson-electronics-nasdaq-rell-director-sells-1000-shares-of-company-stock-2026-11-02/",
      "date": "2026-11-02"
    },
    {
      "title": "Benzinga",
      "url": "https://www.benzinga.com/quote/RELL/sentiment",
      "date": null
    },
    {
      "title": "10Q Q2 FY26 Final Filed 01.08.26",
      "url": "https://www.rell.com/webfoo/wp-content/uploads/2026/01/10Q-Q2-FY26-Final-Filed-01.08.26.pdf",
      "date": null
    }
  ],
  "evidence": [
    {
      "claim": "Fiscal Q1 2027 net sales were $64.9M, up 18.9% from $54.6M, against a $58.985M estimate. Diluted EPS was $0.27 per common share against a $0.09 estimate.",
      "source": "Company Q1 FY2027 release (8-K); Benzinga 2026-10-07",
      "as_of": "2026-10-07"
    },
    {
      "claim": "Backlog was $184.4M, up 36.9% year over year and 12.2% from $164.4M at fiscal year-end.",
      "source": "Company Q1 FY2027 release (8-K)",
      "as_of": "2026-08-29"
    },
    {
      "claim": "Gross margin was 34.6% versus 31.0% a year earlier. About 1.7 points came from a one-time IEEPA tariff refund.",
      "source": "Company Q1 FY2027 release (8-K)",
      "as_of": "2026-08-29"
    },
    {
      "claim": "Power and Microwave Technologies sales rose 19.7% to $46.8M at a 35.4% gross margin; Green Energy Solutions sales rose 27.1% to $9.2M.",
      "source": "Company Q1 FY2027 release (8-K)",
      "as_of": "2026-08-29"
    },
    {
      "claim": "Cash was $36.9M with no borrowings on the PNC revolving credit line. Quarterly free cash flow was $4.2M.",
      "source": "Company Q1 FY2027 release (8-K)",
      "as_of": "2026-08-29"
    },
    {
      "claim": "Shares closed at $19.43, up $1.87 (10.65%), in a $17.55 to $19.67 range on 192,600 shares, with no company news since 2026-10-19.",
      "source": "StockAnalysis.com RELL page",
      "as_of": "2026-11-09"
    },
    {
      "claim": "The two-analyst average price target is $25.50; Northland Securities raised its target to $26 from $24 with an Outperform rating.",
      "source": "StockAnalysis.com RELL page",
      "as_of": "2026-11-09"
    },
    {
      "claim": "CFO Robert Ben sold 5,000 shares for $105,050 in late October. Director Kenneth Halverson sold 1,000 shares for $21,190 on 2026-10-29.",
      "source": "Form 4 sales as reported by Defense World and MarketBeat",
      "as_of": "2026-11-02"
    }
  ],
  "view_changes": [],
  "frame": null,
  "filed_numbers": {
    "as_of": "2026-11-13",
    "sector": "Industrials",
    "financials": {
      "status": "ok",
      "reason": null,
      "close_date": "2026-11-13",
      "latest_quarter": "2026-08-29",
      "figures": {
        "revenue": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-08-29",
              "filed": "2026-10-08",
              "restated": null,
              "value_musd": 64.9,
              "yoy_pct": 18.9
            },
            {
              "end": "2026-05-30",
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              "restated": null,
              "value_musd": 66.2,
              "yoy_pct": 27.6
            },
            {
              "end": "2026-02-28",
              "filed": "2026-04-09",
              "restated": null,
              "value_musd": 55.5,
              "yoy_pct": 3.1
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            {
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              "restated": null,
              "value_musd": 51.9,
              "yoy_pct": 9.5
            }
          ]
        },
        "gross_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-08-29",
              "filed": "2026-10-08",
              "restated": null,
              "pct": 34.6
            },
            {
              "end": "2026-05-30",
              "filed": "2026-08-03",
              "restated": null,
              "pct": 31.2
            },
            {
              "end": "2026-02-28",
              "filed": "2026-04-09",
              "restated": null,
              "pct": 31.9
            },
            {
              "end": "2025-11-29",
              "filed": "2026-01-08",
              "restated": null,
              "pct": 30.7
            },
            {
              "end": "2025-08-30",
              "filed": "2025-10-09",
              "restated": null,
              "pct": 31
            },
            {
              "end": "2025-05-31",
              "filed": "2025-08-04",
              "restated": null,
              "pct": 31.6
            }
          ]
        },
        "operating_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-08-29",
              "filed": "2026-10-08",
              "restated": null,
              "pct": 7.9
            },
            {
              "end": "2026-05-30",
              "filed": "2026-08-03",
              "restated": null,
              "pct": 5.8
            },
            {
              "end": "2026-02-28",
              "filed": "2026-04-09",
              "restated": null,
              "pct": 2.7
            },
            {
              "end": "2025-11-29",
              "filed": "2026-01-08",
              "restated": null,
              "pct": 0.3
            },
            {
              "end": "2025-08-30",
              "filed": "2025-10-09",
              "restated": null,
              "pct": 1.8
            },
            {
              "end": "2025-05-31",
              "filed": "2025-08-04",
              "restated": null,
              "pct": 1.2
            }
          ]
        },
        "pretax_income": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "value_musd": 5
        },
        "net_income": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "four_quarters_end": "2026-08-29",
          "value_musd": 4.1,
          "four_quarters_musd": 8.5
        },
        "operating_cash_flow": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "first_end": "2025-11-29",
          "value_musd": 5.3
        },
        "capital_spending": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "first_end": "2025-11-29",
          "value_musd": 5.1
        },
        "free_cash_flow": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "first_end": "2025-11-29",
          "value_musd": 0.2
        },
        "diluted_share_change": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "base_end": "2025-08-30",
          "pct": 3.8
        },
        "cash": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "value_musd": 36.9
        },
        "debt": {
          "status": "none reported"
        },
        "net_cash": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "value_musd": 36.9,
          "note": "no debt reported"
        },
        "deferred_revenue": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "value_musd": 5.1,
          "yoy_pct": 7.1
        },
        "backlog": {
          "status": "not reported"
        },
        "receivables": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "value_musd": 34.9
        },
        "inventory": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "value_musd": 103.3
        },
        "equity": {
          "status": "ok",
          "end": "2026-08-29",
          "filed": "2026-10-08",
          "value_musd": 169.2
        },
        "market_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-08-29",
          "basis_filed": "2026-10-08",
          "value_musd": 236.4
        },
        "enterprise_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-08-29",
          "basis_filed": "2026-10-08",
          "value_musd": 199.5,
          "note": "no debt reported"
        },
        "ev_sales": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-08-29",
          "basis_filed": "2026-10-08",
          "multiple": 0.8,
          "note": "no debt reported"
        },
        "ev_ebit": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-08-29",
          "basis_filed": "2026-10-08",
          "multiple": 18.8,
          "note": "no debt reported"
        },
        "pe": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-08-29",
          "basis_filed": "2026-10-08",
          "multiple": 27.7
        },
        "pb": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-08-29",
          "basis_filed": "2026-10-08",
          "multiple": 1.4
        },
        "fcf_yield": {
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          "close_date": "2026-11-13",
          "basis_end": "2026-08-29",
          "basis_filed": "2026-10-08",
          "pct": 0.1
        }
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    },
    "short_interest": {
      "status": "ok",
      "settlement": "2026-10-15",
      "published": "2026-10-26",
      "short_pct_of_outstanding": 5.73,
      "days_to_cover": 1.4,
      "change_pct": 3.5
    },
    "insiders": {
      "status": "ok",
      "as_of": "2026-11-15",
      "windows": [
        {
          "days": 90,
          "status": "ok",
          "from": "2026-08-18",
          "bought_usd": 0,
          "sold_usd": 531561.3,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        },
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          "days": 365,
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  },
  "body_markdown": "## Current Thesis\n\nRichardson Electronics is still turning a record $184.4 million order backlog into faster sales and wider margins, and the shares have recovered all of their unexplained early-November drop. The fiscal second-quarter report, expected around 2027-01-07, settles the business case. It is the first quarter without a one-time tariff refund, so it shows how much of the margin gain lasts.\n\nThe shares closed at $19.43 on 2026-11-09, up $1.87 or 10.65% in one session, per StockAnalysis. That followed a 15.44% fall on 2026-11-05 and a 6.55% rise to $17.56 on 2026-11-06. StockAnalysis lists no company headline after 2026-10-19, and the SEC filings listed by StockTitan run only to a Form 4 dated 2026-11-02. Both the drop and the recovery came without news. The business numbers still date from the 2026-10-07 report.\n\nThe fiscal first quarter ended 2026-08-29. Net sales rose 18.9% to $64.9 million, against a $58.985 million estimate, according to Benzinga. Diluted earnings were $0.27 per common share against a $0.09 estimate. Backlog rose 36.9% from a year earlier, per the company's release.\n\nThe story is well known: the earnings beat, the 2026-10-12 ComEd announcement and Northland's mid-October target increase all came within one week, and the company has issued no news since a 2026-10-19 product release for its LaserSlat SAVER laser-table consumable.\n\n## Bull Case\n\n- **Backlog points to more sales growth.** Backlog was $184.4 million on 2026-08-29, per the company's 8-K. That is up 36.9% year over year and 12.2% from $164.4 million at the May 2026 fiscal year-end.\n- **Margins and profit widened sharply.** In fiscal Q1 2027, gross margin rose to 34.6% from 31.0% a year earlier. Operating income climbed to $5.1 million from $1.0 million, and net income rose 112.6% to $4.1 million, per the 2026-10-07 release.\n- **The core segment grows on chip-fab demand.** Power and Microwave Technologies, the largest segment, grew sales 19.7% to $46.8 million at a 35.4% gross margin in the quarter. The company names parts for semiconductor wafer fabs as a driver.\n- **Storage now has a utility partner.** On 2026-10-12, ComEd and Richardson announced expanded production of battery energy storage systems at La Fox, Illinois, with a 5-megawatt-hour demonstration system on site. Green Energy Solutions sales rose 27.1% to $9.2 million in the quarter.\n- **The full year already turned profitable.** Fiscal 2026 net sales were $228.6 million, up 9.4%, at a 31.2% gross margin. Net income was $6.4 million after a loss in fiscal 2025, per the company's 10-K.\n- **Analyst targets sit above the price.** StockAnalysis puts the two-analyst average target at $25.50, about 31% above the 2026-11-09 close. Northland Securities raised its target to $26 from $24 in mid-October and kept an Outperform rating.\n- **Cash and no borrowings.** On 2026-08-29 the company had $36.9 million in cash and nothing drawn on its PNC revolving credit line. Free cash flow for the quarter was $4.2 million.\n\n## Bear Case\n\n- **Part of the margin gain will not repeat.** The company said a refund of tariffs paid under the International Emergency Economic Powers Act (IEEPA) added about 1.7 percentage points to first-quarter gross margin. Without it, the 34.6% margin would have been closer to the prior year's 31.0%.\n- **Storage is still small and slow.** Green Energy Solutions was $9.2 million of $64.9 million in fiscal Q1 sales. The company describes 12- to 18-month sales cycles for battery storage, so the ComEd partnership will take time to reach revenue.\n- **One customer carries real weight.** A single customer was 14% of fiscal 2026 sales, per the 10-K, inside the chip-fab-exposed Power and Microwave Technologies segment. A pause in wafer-fab spending would hit the largest segment first.\n- **Insiders sold after the report.** CFO Robert Ben sold 5,000 shares for $105,050 in late October, a 7.63% cut to his holding. Director Kenneth Halverson sold 1,000 shares for $21,190 on 2026-10-29, per Form 4 filings reported by Defense World and MarketBeat on 2026-11-02.\n- **The shares swing hard on no news.** Moves of minus 15.44%, plus 6.55% and plus 10.65% across three sessions from 2026-11-05 to 2026-11-09 came with no company headline. Volume on 2026-11-09 was 192,600 shares, per StockAnalysis, so modest orders move the price.\n- **Coverage is thin.** Benzinga lists two analysts behind the Outperform consensus as of 2026-11-06. The $25.50 average target rests on very few forecasts.\n\n## Setup & Price Structure\n\nThe 2026-11-09 close of $19.43 is 10.4% below the 52-week high of $21.68 on adjusted daily closes. The shares are down 5.2% over three months. The 14-day relative strength index (RSI) is 51.5, a neutral reading.\n\nThe session on 2026-11-09 traded between $17.55 and $19.67, per StockAnalysis. The 2026-11-06 close of $17.56 sits at the bottom of that range. The 2026-11-05 close after the 15.44% drop is the lowest close of the swing. The $21.68 52-week high is the level the shares would need to clear to show new buying beyond a recovery from the drop.\n\nCrowding signals are mixed. The RSI does not show stretched buying, and the next report is about two months away. The late-October insider sales are the only selling into strength on record, and no Form 4 after 2026-11-02 appears in the SEC filing list.\n\n## Catalyst Calendar\n\n- **2026-11-25:** Quarterly dividend payment ($0.06 per common share, $0.054 per Class B share). Completes the payout declared with the fiscal Q1 report; it is funded from cash and does not test the growth case.\n- **~2027-01-07 (est.):** Fiscal Q2 2027 report. The first quarter without the tariff refund. It shows whether gross margin stays above the prior-year 31.0% and whether the $184.4M backlog keeps turning into sales.\n\n## What Would Change Our Mind\n\nA daily close below $16.40, under the 2026-11-05 close that followed a 15.44% one-day drop. A second break would be fiscal Q2 backlog below the $164.4 million fiscal year-end level, or gross margin at or below 31.0%.\n\nThe risks this note tracks, each with what would confirm it:\n\n- The first-quarter margin gain partly reverses once the one-time tariff refund drops out. Confirmed by: Fiscal Q2 gross margin back near or below 31.0%.\n- Chip wafer-fab spending slows and hits Power and Microwave Technologies, where one customer was 14% of fiscal 2026 sales. Confirmed by: A year-over-year sales decline in Power and Microwave Technologies, or backlog below $164.4M, at the fiscal Q2 report.\n- Battery storage revenue arrives more slowly than the pipeline suggests, given 12- to 18-month sales cycles. Confirmed by: Green Energy Solutions sales growth falling below double digits, or a delay to the La Fox expansion or ComEd demonstration project.\n- Insiders keep selling shares after the late-October sales by the CFO and a director. Confirmed by: New SEC Form 4 filings showing further officer or director sales after 2026-11-02.\n- The unexplained 15.44% drop on 2026-11-05 reflected a problem not yet disclosed. Confirmed by: A company release, SEC filing or named analyst downgrade citing lost orders, customer trouble or new financing.\n\n## Correlation Notes\n\nThe largest segment, Power and Microwave Technologies, tracks semiconductor wafer-fab equipment spending, so the shares can move with chip-equipment makers on industry spending news. Green Energy Solutions ties a smaller part of the story to grid battery storage and Illinois utility programs. The shares trade on a US exchange with low daily volume, which makes them more sensitive to small-cap flows than to the large-cap index.",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-10T11:14:31+00:00",
  "last_synthesized": "2026-11-10",
  "date_modified": "2026-11-10",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}