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DXP Enterprises at New 52-Week High - Analyst Blog

By: Zacks.com
Posted: 12/2/2013 2:53:00 PM
Referenced Stocks: DXPE;GHM;MIDD;XYL

Shares of DXP Enterprises, Inc. ( DXPE ) reached a new 52-week high of $98.68 during its trading session on Nov 29. This denotes an increase over the previous high of $98.00 reached on Nov 27.  

DXP Enterprises closed the trading day on Nov 29 at $97.98, reflecting a solid year-to-date return of 94.1%. The trading volume for the session was 0.02 million shares. Further upside potential exists for this Zacks Rank #2 (Buy) industrial equipment wholesaler as can be deduced from its positive earnings estimate revisions in the last 60 days and expected earnings growth of 19.2% for 2014.

Growth Drivers

Results of DXP Enterprises for the third quarter 2013 were impressive and following the release on Oct 30, 2013, the company's shares rose by 18.3%. Earnings per share in the quarter were $1.07, up 24.4% year over year and 7.0% above the Zacks Consensus Estimate of $1.00   

Sales increased 13.7% as Service Centers and IPS segments of DXP Enterprises recorded healthy performance, offset partially by weak results from the SCS segment. On a same store sales basis, revenue in the quarter grew 3.8%.     

Increase in sales negated the impact of 12.7% rise in cost of sales. Gross margin in the quarter was up 70 basis points at 29.5%. Operating income grew 9.7% year over year and the margin stood at 8.2%.

Going forward, management of DXP Enterprises intends to deliver solid results on the back of organic as well as contributions from acquisitions. Possibility is high for a good quarter performance ahead, after considering this, and a positive 8.9% average earnings surprise of the trailing four quarters.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for DXP Enterprises has increased by 1.3% to $3.90 for 2013 and by 1.1% to $4.65 for 2014, respectively.

DXP Enterprises currently has a market capitalization of $1.4 billion and carries a Zacks Rank #2 (Buy). Some other stocks worth considering in the machinery-general industries include Xylem Inc. ( XYL ), Graham Corp. ( GHM ) and Middleby Corp. ( MIDD ). While Xylem carries a Zacks Rank #1 (Strong Buy), Graham and Middleby both hold a Zacks Rank #2 (Buy).



DXP ENTERPRISES (DXPE): Free Stock Analysis Report

GRAHAM CORP (GHM): Free Stock Analysis Report

MIDDLEBY CORP (MIDD): Free Stock Analysis Report

XYLEM INC (XYL): Free Stock Analysis Report

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