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DXP Enterprises Inc. (DXPE - Free Report) continues to see improvement in its markets and is expected to grow earnings by 47% in 2011. This Zacks #1 Rank (strong buy) is trading at only 11.4x.

DXP Enterprises is a distributor of products and services to industrial customers in the United States and Sonora, Mexico.

The company provides pumping solutions, supply chain services and maintenance as well as technical expertise in rotating equipment, bearings, power transmission and industrial supplies.

DXP Enterprises Surprised for the 7th Straight Quarter

On July 27, DXP Enterprises reported its second quarter results and beat the Zacks Consensus Estimate by 8.7%. It continued a streak of beating on the consensus which goes back to early 2010.

Earnings per share were 50 cents compared to the consensus of 46 cents. It made just 31 cents a year ago.

Sales rose 18.2% to $197.7 million from $167.3 million in the second quarter of 2010.

Outlook for 2011 Still Positive

As of July, DXP Enterprises was still bullish on the second half of 2011. Most of its customers and its markets continue to show improvement, especially in the oil and gas sector.

The 2011 Zacks Consensus Estimate rose to $1.94 from $1.87 in the last 30 days. The estimates are going in the correct direction, as you can see from the chart below. Notice that the red and blue lines are going up to the right of the chart which represents earnings growth.

Analysts expect earnings growth of 47% in 2011 as the company made just $1.32 in 2010.

Pullback Makes DXPE Even Cheaper

The 2-year higher trend was broken in the recent sell off. But that means shares have gotten cheaper.

In addition to a P/E under 12, the company has a price-to-book ratio of 2.2. A P/B ratio under 3.0 usually indicates value.

DXP Enterprises also has a stellar price-to-sales ratio of just 0.4. A P/S ratio under 1.0 usually means a company is undervalued.

Additionally, the company has a strong 1-year return on equity (ROE) of 19.8%.

DXP Enterprises is benefiting from the economic rebound, especially in the oil and gas sectors. At just 11.4x forward estimates, it also has strong value fundamentals.

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Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her at

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