The small-cap industrial giant DXP Enterprises (NYSE: DXPE) continues expanding its footprints in the industrial sector, supported by improving business prospects and its investment in organic and inorganic growth opportunities. DXP Enterprises stock price jumped 21% after topping fourth-quarter revenue and earnings estimates by a wide margin of $16 million and $0.29 per share, respectively.
DXPE shares rose 29% in the last month alone, extending the three-month rally to 35%. DXP Enterprises shares are trading around $40 at present, down slightly from the 52-week high of $42 a share.
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Rating agencies are the dividend on its price targets. Zacks Investment Research lowered its rating to ‘Hold’ from ‘Buy’ rating.
Two investment analysts from BidaskClub rated DXPE stock with a hold rating, while two others have rated it with a buy rating – with an average target price of $44.00.
Insiders have also been increasing their position in DXP Enterprises stock amid growing financial numbers and the improving business outlook. AlphaOne Investment Services LLC enhanced its stake in DXPE by 111.5% in the latest quarter, increasing the total numbers of shares to 96,250.
Financial and Business Outlook is Impressive
Its sales of $265 million in the final quarter of 2017 increased 19% year on year and up 5% sequentially, driven by growth across the business segments. DXP is a product and service distributor to industrial customers throughout the Canada, United States, Mexico, and Dubai.
Industrial markets are generating steady growth over the last year, amid improving economic and infrastructure-related activates all over the world.
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Global GDP increased by 3.7% last year, the highest pace in the last six years, according to the Organization for Economic Co-operation and Development (OECD). On the other hand, United States president Donald Trump plans for aggressive spending in growth and infrastructure activates, which will generate additional demand for industrial companies.
“As we look ahead, we expect to accelerate organic sales growth, EBITDA margin enhancement, with strong cash flow generation and growth in earnings,” Kent Yee, CFO said.
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