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The last week in October was a good one for SmartGuyStocks. Two-time pick DXP Enterprises (NASDAQ:DXPE) announced third quarter earnings that trounced analyst expectations, sending the stock up over 15%. The announcement must have been extra sweet for DXPE CEO David Little, who just months prior was derided as a bumbling idiot, as he struggled to account for the second quarter's “unexplained” June sales softness.

Little feebly tried to mention that DXPE still expected top-line growth of 30+% in the third and fourth quarters, and that the acquisition pipeline looked stronger than ever, but the analysts had apparently already checked out. Disgusted that DXPE had “only” reported 22% sales growth, they sent shares down over 25% in one day.

At that point, we decided to re-recommend DXPE at a bargain price in the low 30s. It looks like Little has been true to his word, first by landing a major acquisition of Precision Industries, and then by announcing a 56% increase in third quarter sales and a 25% jump in EPS. He also noted that the Precision acquisition has been exceeding expectations, expediting DXPE’s ambition to be a national distribution powerhouse.

Now that Little has redeemed himself to his critics, at least temporarily, it’s back to the thankless work of consolidating the industrial distribution industry. I continue to recommend buying on any weakness as we watch this growth story continue to progress. This is going to be fun.

Disclosure: SmartGuyAB is long DXPE.

DXPE 1-yr chart:

Source: Third Quarter Brings Redemption To DXP’s CEO

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