DXP Enterprises, Inc. (DXPE)

buyout of competition; increase in sales; bold management holding large amount of shares

At first impressions it looks like a solid company, will have to dig and do more research.
Apparently the recession has ended according to Buffett and Bernanke, once the industrial companies start expanding their budgets this one will follow to its former glory IMO.

Good cash flows, very reasonable valuation per ROE & margins as a function of Price/Sales. Niche business that will find it's glory again soon.

bull

Zacks Research picks May and June

Sweet company

value

Low relative PE, good star ranking, PEG & 09 PE still below normal - bottom fishing.

This company has dramatically impressive earnings quarter after quarter. Its stock price fluctuates wildly at the market's whim, but only because so few people really understand what they do.

DXPE sells replacement parts (new and reconditioned) for all kinds of pumping equipment. These are not discretionary products. If companies want to keep moving fluids (Oil, Water, Chemicals) then they have to keep their equipment and fluid carrying infrastructure operational.

DXPE has put its earnings to good use, snapping up minor competitors to build their geographic presence and the breadth of their product offerings.

Because this stock is so volatile, it's not for the faint of heart, but right now it's an unbelievable bargain. In my real life portfolio, I'm planning to get in and out of it several times in the next month or so, playing the 10 to 15% swings. But I consider it a good investment in the medium-term as well.

I've dug deep into this one and found a lot to like.

1) Growth. Sales and earnings are up for Q3 and YTD. And it's not just acquisitions driving the numbers; excluding '07 and '08 acquisitions, Q3 sales are up 13.5% and YTD sales are up 18.9%. YTD earnings are $1.38 vs. $0.93 in 2007. They've been on this track for a while now and there's no reason to think they can't keep it up: The MRO distribution business is a highly fragmented, target-rich environment. Value-added product offerings should enable them to grab and hold more market share as customers continue to look for more efficiency in the supply chain.

2) Experience. The Chairman/CEO has been in the industry for over 30 years and has run the show form 20+ years. The rest of the senior management team has significant experience, too.

3) Ownership stake. Officers own nearly 40% of the common stock as of the last annual report. CEO's direct ownership is something like 13%, with an additional 16% or so held in trust for his kids. There's been some insider selling in the last year or so, but the CEO just picked up 15,300 shares @ $10.90.

4) Value. Current P/E is around 6. Forward P/E of just 5 or so. PEG is low, low, low. Concerns about trouble in the oil patch could be a drag.

What's not to like? This is a thinly traded small cap. A recent split could boost liquidity a bit. Debt is climbing and bears watching closely. Margins are a little on the thin side.

Solid and severely undervalued right now as well as a broad range of services. My father was in the oil & gas industry in TX for 30 years and there wasn't a week or month that went by he didn't see DXP everywhere.

Stocks followed at another site that look promising based on past performance.

Undervalued and making new highs on strong increasing earnings YTD.

A strong stock will be stronger.

Love the PS of 0.67...just lovely...Sales and EPS growing the last 5+ years. EPS has beat estimate last 4 quarters and sales has increased by triple digit percentages last 3 quarters as well. 97/95 IBD EPS/Relative price strength rating.From a currently strong sector, macinery/industrial, so that helps too.

Excellant ratios:
RoE = 29.43 5 yr ave
5 yr sales growth = 24.59
5 yr EPS growth = 50.17

My one main concern (and why I won't buy DXPE in anything besides monopoly $$) is that it has a volume of around 100 K a day...I dont like compaies thisssss small and not liquid. Scary stuff for me. Net profit margin of 3.5 is awfully low for the industry.

Any company using the services of Dutton and Associates to promote its stock is extremely suspect.

Huge!

Yes, I'm sure!

The industry consolidation story hasn't changed...This stock, although volatile, will produce market-beating returns over the next few years.

http://smartguystocks.com/?p=11