Zacks Investment Research upgraded
DXP Enterprises, Inc.
) to a Zacks Rank #1 (Strong Buy) on Apr 20, 2013.
Why the Upgrade?
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Sound track record of posting better than expected quarterly
financial results and benefits from strategic acquisitions have
helped the shares of DXP Enterprises rise by approximately 55%
year-to-date. A brief review of the last reported quarterly
results and the acquisitions made, will to some extent, justify
our bullish stance on the company.
DXP Enterprises reported a year-over-year improvement of 51% in
its earnings per share for the fourth quarter 2012; announced on
Feb 27, 2013. The company's earnings came in at 92 cents per
share, compared with 61 cents reported in the year-ago quarter
and 10.8% above the Zacks Consensus Estimate of 83
Revenue increased by 34% to settle at $293 million on the back of
solid performances at its segments. Despite a rise in the cost of
sales and operating expenses, operating margin in the quarter was
8.3% above 6.9% in the year-ago quarter.
Over and above the satisfactory the financial results in the year
2012, DXP Enterprises completed seven acquisitions with the help
of nearly $37 million in free cash flow generated during the
year. We see that the company's policy to expand is at its pace
in year 2013 as well. Recently, on Apr 17, 2013, the company
completed acquiring National Process Equipment, Inc. The
acquisition has made DXP Enterprises the largest rotating
equipment distributor across North America.
The earnings estimates are on the rise for this provider of MRO
products, equipment and services. The Zacks Consensus Estimate,
in the last 60 days has gone up by 4.2% both for 2013 and 2014 to
settle at $3.93 and $4.50, respectively. DXP Enterprises is
slated to release its first quarter 2013 financial results on Apr
All these together with a positive earnings surprise in all the
four trailing quarters with an average of +11.6%, have raised
optimism for better results ahead. For 2013 and 2014, we have an
Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) of +24.2% and +11.6%, respectively.
Other Stocks to Consider
DXP Enterprises caters to the needs of its industrial customers
by providing maintenance, repair and operating (MRO) products,
equipment and services. The company currently has a market
capitalization of roughly $943 million.
Other stocks worth a look in the industry are
Tri-Tech Holding, Inc.
EnPro Industries, Inc.
The Babcock & Wilcox Company
), each holding a Zacks Rank #1 (Strong Buy).