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).
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