Seeking Alpha

Wesco (WCC) is a US distributor of products and supplies to the construction and utility industries as well as to industrial firms and the government. Like larger distribution peers Grainger WW (GWW) and Fastenal (FAST), $3.1B market cap Wesco is growing very rapidly and benefiting from the accelerated consolidation going on in the distribution industry.

Current Valuation:

Wesco trades at ~15.5x ttm EPS and less than 11x 2014 consensus estimates ($6.51). This makes the firm very undervalued given its growth rate, its average historic P/E (21x), and peer P/E's of GWW (27x ttm EPS) and FAST (32x ttm EPS). Given this, WCC looks undervalued by at least 35 percent and more likely 60%, which...

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