Validea’s pick of the week provides a detailed report on a company that scores well in the stock-screening service’s model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.
Industrial supply/solutions firm DXP Enterprises Inc. provides pumping solutions, supply chain services and maintenance, repair, operating and production services to customers in the United States, Canada and Mexico. The oil and gas industry is its biggest customer, with about 40 per cent of its customers coming from there. DXP has a market cap of $1.4-billion (U.S.)
The company has grown earnings at a 29-per-cent pace over the long term (using an average of the 3- and 5-year EPS growth rates), which the Peter Lynch based model likes. It has grown sales at a 17-per-cent pace over long-term, (using an average of the 3-, 4-, and 5-year sales growth rates). And it has a 0.87 P/E-to-growth ratio, helping it get strong interest from the Lynch model.
DXP gets strong interest from the James O'Shaughnessy based growth model, in part because it has increased EPS in each year of the past half-decade. The O'Shaughnessy model also likes its 1.16 price/sales ratio and 74 relative strength.
Debt/equity ratio (66 per cent) comes in below the Lynch model's 80-per-cent limit. DXP has has 24-per-cent return on equity (12 month) and a 29-per-cent return on retained earnings over past decade, which the Warren Buffett-based model likes.
The company has a 2.1 current ratio, a sign of good liquidity, according to the Benjamin Graham-based approach and a solid 44.1-per-cent return on capital, using the EBIT/total capital employed metric the Joel Greenblatt-based model uses.
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