At the end of October last year, I wrote that by buying shares of DXP Enterprises ( DXPE ), you can take advantage of the inefficiency that had arisen – the market at that time didHi there! I’m Narek, and I’ve been in the investment world for over six years. I started out as an equity analyst at European banks, digging into reports and learning how to spot value in the markets. I’ve worked across sectors — from telecom to industry — and found that behind every financial statement is a real story. I studied ...

Core Viewpoint - DXP Enterprises, Inc. has successfully completed the acquisition of Ambiente H2O Inc., enhancing its water and wastewater service platform [1][3]. Company Overview - DXP Enterprises, Inc. is a prominent distributor of products and services, providing solutions to industrial customers across the United States, Canada, Mexico, and Dubai. The company specializes in innovative pumping solutions, supply chain services, and maintenance, repair, operating, and production (MROP) services [6]. Acquisition Details - Ambiente H2O Inc., founded in 2006 and headquartered in Sheridan, Colorado, operates in Colorado, Idaho, Montana, Utah, and Wyoming, focusing on pumps, process equipment, and instrumentation for the water and wastewater industry [1][2]. - The acquisition was funded through cash from DXP's balance sheet [2]. - Ambiente reported sales of approximately $8.1 million for the twelve months ending December 31, 2025 [4]. Strategic Importance - The acquisition of Ambiente is seen as a strategic move to strengthen DXP's water and wastewater platform, providing exceptional service and technical sales expertise [3][5]. - DXP aims to scale Ambiente and accelerate sales growth, which is expected to benefit customers, employees, and shareholders [5].

Core Viewpoint - DXP Enterprises, Inc. has completed the acquisitions of PREMIERflow, LLC and Mid Atlantic Storage Systems Inc., enhancing its project capabilities and market presence in various sectors [1][4]. Company Acquisitions - DXP funded the acquisitions using cash from its balance sheet, with financial terms not disclosed [1]. - The signing of definitive agreements occurred on January 1, 2026, with PREMIERflow and Mid Atlantic contributing approximately $93.7 million in sales and $20.9 million in adjusted EBITDA for the eleven months ending November 30, 2025 [5]. Strategic Importance - The acquisitions align with DXP's growth strategy, aiming to expand into varied end markets and maintain its position as the largest distributor of rotating equipment in North America [4]. - Both companies provide exceptional project capabilities that will enhance DXP's ability to serve customers and grow existing platforms [2][4]. Market Focus - PREMIERflow specializes in integrated fluid handling pump systems for fire protection, water & wastewater supply, data centers, and HVAC process industries [2]. - Mid Atlantic Storage Systems offers liquid storage tank products and services, focusing on water & wastewater, leachate, data center, and fire suppression markets [3]. Leadership Insights - DXP's CEO, David Little, expressed enthusiasm about the acquisitions, highlighting their potential to enhance DXP's offerings and market share [4][6]. - The President of PREMIERflow noted that joining DXP will allow for better customer service and competitive positioning in the market [6]. - The President of Mid Atlantic Storage Systems emphasized the complementary nature of their expertise with DXP's approach to building the DXP Water platform [7]. Employee and Market Impact - The acquisitions will add over 185 employees to DXP, diversifying its products, services, and end market exposure [8]. - DXP anticipates that these acquisitions will be accretive to earnings and provide momentum going into 2026 [8].

Core Insights - DXP Enterprises successfully completed a refinancing of $848 million, which includes $643 million in existing Term Loan B borrowings and an additional $205 million, aimed at enhancing liquidity and flexibility for growth [1] - The refinancing is expected to generate approximately $3.2 million in annual interest savings, allowing for strategic reinvestment and potential acquisitions [1] - DXP's sales have increased from $1.0 billion in 2020 to $1.96 billion for the twelve months ending September 30, 2025, with adjusted EBITDA rising from $64.9 million to over $225 million during the same period [1] - The company's pro forma net debt to EBITDA ratio stands at 2.8:1 following the refinancing [1] Company Overview - DXP Enterprises, Inc. is a leading distributor of products and services, providing value-added solutions to industrial customers across the United States, Canada, Mexico, and Dubai [1] - The company specializes in innovative pumping solutions, supply chain services, and maintenance, repair, operating, and production (MROP) services, leveraging extensive product knowledge and technical expertise [1] - DXP's business segments include Service Centers, Innovative Pumping Solutions, and Supply Chain Services, which create competitive advantages for customers [1]

Group 1 - DXP Enterprises (DXPE) has experienced a 23% increase in stock price over the last month following a 30% decline in November after the release of its Q3 earnings [1] - The company reported a significant miss on adjusted EPS and recorded its first year-over-year earnings decline [1]

Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. However, it isn't easy to find a great growth stock.By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss.However, it's pretty easy to find cutting-edge growth stocks with the help of the Zacks Growth Style Sco ...

Core Insights - The article emphasizes the importance of strong foundational companies in the technology, industrial, and conglomerate sectors for long-term success [1] Group 1: Company Analysis - Companies with robust financials and strategic narratives are highlighted as having the potential for sustained performance [1] - The analysis combines financial metrics with storytelling to provide insights into market dynamics and company prospects [1]

Core Insights - The article emphasizes the importance of strong foundational companies in the technology, industrial, and conglomerate sectors for long-term success [1] Group 1: Company Analysis - The focus is on analyzing diverse businesses, particularly those with robust financials and strategic positioning [1] - The analysis combines financial metrics with narrative storytelling to provide insights into market performance [1] Group 2: Industry Perspective - There is a clear dedication to understanding and explaining the financial world, highlighting the significance of both quantitative and qualitative analysis in investment research [1]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on DXP Enterprises (DXPE), and emphasizes the importance of using these recommendations in conjunction with other research tools like the Zacks Rank to make informed investment decisions [1][5][11]. Brokerage Recommendations - DXP Enterprises has an average brokerage recommendation (ABR) of 1.83, indicating a consensus between Strong Buy and Buy, with one Strong Buy and one Buy recommendation from three brokerage firms [2][5]. - The distribution of recommendations shows that Strong Buy and Buy each account for 33.3% of the total recommendations [2]. Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations have limited success in guiding investors towards stocks with the best price increase potential, often reflecting a strong positive bias due to the vested interests of brokerage firms [5][6][11]. - Analysts tend to issue more favorable ratings than their research would support, which can mislead investors [11]. Zacks Rank as an Alternative - The Zacks Rank is presented as a more reliable indicator of a stock's near-term price performance, based on earnings estimate revisions, and is classified into five groups from Strong Buy to Strong Sell [8][12]. - The Zacks Rank is updated more frequently than the ABR, making it a timely tool for predicting future stock prices [13]. Current Earnings Estimates for DXP Enterprises - The Zacks Consensus Estimate for DXP Enterprises remains unchanged at $4.75 for the current year, suggesting steady analyst views on the company's earnings prospects [14]. - The unchanged consensus estimate has resulted in a Zacks Rank of 3 (Hold) for DXP Enterprises, indicating a cautious approach despite the Buy-equivalent ABR [15].

Core Thesis - DXP Enterprises, Inc. presents a compelling bullish case due to its strong execution across diversified segments, record backlogs, and disciplined capital allocation [2][5] Financial Performance - As of December 2nd, DXP's share was trading at $96.50, with a trailing P/E of 17.64 [1] - Consensus estimates project Q3 revenue of $499 million and EPS of $1.57, with a stronger base case of $502–$512 million in revenue and $1.55–$1.65 in EPS [2] - In Q2, DXP reported an EPS of $1.43, beating estimates, with revenue of $498.7 million [3] Segment Performance - Innovative Pumping Solutions (IPS) grew 27.5% year-over-year with 19.9% margins, while Service Centers rose 10.8% at 14.8% margins [3] - The Water segment has shown resilience, marking its 11th consecutive quarterly increase [4] Strategic Initiatives - Management expresses confidence in sustained project flow, particularly from IPS bookings, which provide visibility for the next 9–12 months [4] - Recent acquisitions, including McBride and Moores Pump, are expected to enhance scale and quality [4] Market Conditions - The macroeconomic backdrop is favorable for DXP's hybrid MRO-plus-project model, with manufacturing below 50 and services above 50 [5] - Key watchpoints include backlog trends, SCS profitability improvements, and ongoing M&A activity [5]