Investors seeking exposure in the machinery space can choose from stocks that don favorable Zacks Rank #1 (Strong Buy) or #2 (Buy). Of the many investment options, we believe that DXP Enterprises, Inc. (DXPE - Free Report) will be a smart choice. The stock currently carries a Zacks Rank #1 and it has a favorable VGM Score of A.
DXP Enterprises belong to the machinery sub-industry, which has companies that primarily work for general industries. This industry is positioned in the top 37% of more than 250 Zacks industries. Per our research, the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
We believe that machinery companies gain from favorable policy changes, expanding industrial production, healthy growth in infrastructural investments, rising demand for machinery made in the United States and the rising global economy. However, trade tiffs between nations, restricting business growth, are concerns.
Below we discussed why investing in DXP Enterprises will be a smart choice for investors.
Share Price and Earnings Performances, Robust Bottom-Line Outlook: Market sentiments seem to be working in favor of DXP Enterprises. The company’s share price has yielded 18% in the past month compared with 7.4% growth recorded by the industry.
We believe that much of the upside in DXP Enterprises’ share price has been induced by solid financial performance in the third quarter of 2018. Its earnings surpassed the Zacks Consensus Estimate by 17.95% and surged 187.5% from the year-ago tally. It’s worth mentioning here that the company surpassed estimates in three (including results of the third quarter) of the last four quarters while missing in one. Average earnings surprise was a positive 112.62%.
In the quarters ahead, DXP Enterprises anticipates gaining from healthy demand in industrial and oil markets, and advancing global market. Solid organic sales growth, synergistic gains from acquired assets and efforts to improve operational execution will support earnings growth.
DXP Enterprises does not provide earnings projections but upward revision in earnings estimates by brokerage firms is reflective of positive sentiments toward the company. In the past 30 days, earnings estimates for 2018 and 2019 have been raised by one brokerage firm. Currently, the Zacks Consensus Estimate for earnings per share stands at $1.70 for 2018 and $2.09 for 2019, reflecting growth of 13.3% and 9.4% from the respective 30-day-ago tallies. Further, these estimates represent year-over-year growth of 97.7% for 2018 and 22.7% for 2019.
DXP Enterprises, Inc. Price and Consensus