Thursday, June 24, 2010

Stock Buy: DXP Enterprises Inc.

http://www.dxpe.comDXP Enterprises Inc. (DXPE: 15.44 +0.45 +3.00%) is seeing its markets begin to improve as the global economy recovers. Analysts are bullish and expect earnings growth of 45.9% in 2010.
DXP Enterprises is an industrial distributor of products and services. It distributes Innovative Pumping Solutions (IPS), Precision Supply Chain Services, and offers MROP Service Centers (maintenance, repair, operating and production).
It distributes pumps, bearings, seals, hoses, safety, fluid power, electrical and industrial supplies.
DXP Enterprises Surprised in the First Quarter by 37%
On May 3, DXP Enterprises announced its first quarter results and surprised by 7 cents per share. Earnings per share were 26 cents, which was higher than the 23 cents earned in the first quarter of 2009.
Sales, however, fell 6.7% to $147 million from $157.6 million in the year ago quarter. But sales were higher in the first quarter by 6.6% compared to the fourth quarter of 2009.
The company says it continues to drive efficiencies and manage working capital. It also paid down long-term debt by $5.3 million in the first quarter.
Zacks Consensus Estimates Rise
The second quarter and full year estimates have risen since the company reported first quarter results in early May.
The second quarter Zacks Consensus is up 4 cents to 28 cents in the last 60 days.
The full year has risen by 17 cents to $1.17 per share over the last 60 days. Analysts are also pretty bullish about 2011 as they expect earnings growth of 35% over 2010.
Value Fundamentals
DXP Enterprises is a Zacks #1 Rank (strong buy) stock .It is trading with a forward P/E of 12.8, which is well under the industry average of 17.5.
Its price-to-book ratio is 2.1, which is within the value parameters. The price-to-sales ratio is also low, at 0.4.

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