Financial Performance - Sales increased by 8.6% to $513.7 million in Q3 2025, compared to $472.9 million in Q3 2024[7] - Organic sales grew 11.5% year-over-year[7] - Acquisition sales contributed $18.4 million to total sales[7] - Net income increased 2.5% to $21.6 million for the third quarter, compared to $21.1 million for the third quarter of 2024[7] - Earnings per diluted share increased to $1.31, based on 16.5 million diluted shares, compared to $1.27 in Q3 2024, based on 16.6 million diluted shares[7] - Cash flow from operating activities increased 23.1% to $34.9 million, compared to $28.3 million in Q3 2024[7] - Free Cash Flow increased 15.4% to $28.1 million, compared to $24.4 million in Q3 2024[7] - Adjusted EBITDA was $56.5 million, compared to $52.4 million for the third quarter of 2024[7] - Adjusted EBITDA margin was 11.0%, compared to 11.1% respectively[7] Strategic Actions - The company closed one acquisition during the third quarter and two subsequent to quarter end[7]

Financial Performance - DXP reported third quarter 2025 sales of $513.7 million, an 8.6% increase compared to $472.9 million in Q3 2024[6] - Adjusted EBITDA for the third quarter was $56.5 million, up from $52.4 million in the same quarter last year, representing an Adjusted EBITDA margin of 11.0%[6] - Net income for the third quarter increased 2.5% to $21.6 million, compared to $21.1 million in Q3 2024[6] - Diluted earnings per share for the third quarter was $1.31, based on 16.5 million diluted shares, compared to $1.27 in Q3 2024[6] - Operating income for Q3 2025 was $75.0 million, up 7.3% from $69.9 million in Q3 2024[19] - Adjusted net income for Q3 2025 was $22.2 million, slightly down from $23.7 million in Q3 2024[28] - EBITDA for Q3 2025 was $54.3 million, compared to $48.2 million in Q3 2024, marking a 12.5% increase[23] - The company reported an EBITDA margin of 10.6% for Q3 2025, compared to 10.2% in Q3 2024[23] Cash Flow and Liquidity - Cash flow from operating activities rose 23.1% to $34.9 million, compared to $28.3 million in Q3 2024[6] - Free Cash Flow increased 15.4% to $28.1 million for the third quarter, compared to $24.4 million in Q3 2024[6] - Free cash flow for Q3 2025 was $28.1 million, an increase from $24.4 million in Q3 2024[27] Revenue Breakdown - Revenue from Service Centers was $350.2 million, a 10.5% year-over-year increase, with a 14.7% operating income margin[6] - Revenue from Innovative Pumping Solutions was $100.6 million, an 11.9% year-over-year increase, with an 18.3% operating income margin[6] - Organic sales for Q3 2025 totaled $495.3 million, a 11.5% increase from $444.4 million in Q3 2024[26] Balance Sheet - Total debt outstanding as of September 30, 2025, was $644.0 million, with a secured leverage ratio of 2.31:1.0[4] - Total assets as of September 30, 2025, were $1.444 billion, up from $1.349 billion at the end of 2024[17] - Total liabilities increased to $956.1 million from $926.7 million at the end of 2024[17] Acquisitions - DXP completed three acquisitions through Q3 2025 and two additional acquisitions in Q4 2025[5]

Core Insights - DXP Enterprises reported third-quarter results with sales growth of 8.6% year-over-year to $513.7 million, exceeding analyst estimates, but adjusted earnings fell short, posting $1.34 per share, which was 14.4% below the consensus estimate of $1.57 per share [1] - The market reacted negatively to the earnings miss, leading to a 17.8% drop in shares, indicating a focus on profitability over revenue growth [1] - DXP's stock has shown significant volatility, with 23 moves greater than 5% in the past year, highlighting the impact of recent news on market perception [3] Market Context - The broader market has experienced fluctuations due to negative economic news and rising consumer inflation expectations, which have contributed to investor fatigue and a pullback from recent rallies [4] - DXP's stock is currently trading 19.8% below its 52-week high of $127.63, despite being up 21.4% since the beginning of the year [5] - The market sentiment is mixed, with positive factors like anticipated monetary easing countered by concerns over slowing consumption and inflation [4]

Investment Philosophy - The importance of saving a portion of income, recommending a minimum of 10% regardless of the amount earned [1] - Emphasis on investing in sectors aligned with one's expertise, suggesting that individuals should focus on their competitive advantages [1] - Advocating for a long-term investment strategy rather than trading, with a focus on maintaining investment validity [1] - Encouragement to pursue passions over purely financial gains, highlighting the long-term happiness that can come from such choices [1] Personal Background - The individual has a diverse background in engineering, finance, and asset management, with experience in various sectors including natural resources, TMT, consumers, industrials, and transportation [1] - Transitioned from hedge fund management to establishing an asset management firm for family, friends, and high-net-worth individuals [1]

Core Viewpoint - DXP Enterprises, Inc. has completed the acquisition of Triangle Pump & Equipment, Inc., enhancing its capabilities in the water and wastewater industry and expanding its geographic reach [1][2][3]. Company Overview - DXP Enterprises, Inc. is a leading distributor of products and services, providing solutions to industrial customers across the United States, Canada, Mexico, and Dubai [5]. - The company specializes in innovative pumping solutions, supply chain services, and maintenance, repair, operating, and production (MROP) services [5]. Acquisition Details - Triangle Pump & Equipment, Inc. is a manufacturer’s representative and distributor focused on the water and wastewater industry, with sales of approximately $15.1 million and adjusted EBITDA of about $2.4 million for the twelve months ending June 30, 2025 [3][4]. - The acquisition was funded with cash from DXP's balance sheet, and the definitive agreement was signed on November 1, 2025 [2][3]. Strategic Implications - The acquisition is expected to enhance DXP's Water division by providing new geographic territories and capabilities, furthering its mission to build a comprehensive platform for municipal and industrial water and wastewater treatment markets [4][7]. - DXP aims to continue scaling its operations with more acquisitions planned for 2026, indicating a strategic focus on growth in the water and wastewater sector [4][7].

Core Insights - DXP Enterprises is set to release its Q3 2025 earnings results on November 3, 2025, with expected earnings of $1.45 per share and revenue of $499 million [2] - The company reported Q2 2025 earnings of $1.43 per share, exceeding analysts' expectations of $1.39, with revenue of $498.68 million, slightly below the forecast [3] Financial Performance - DXP Enterprises has a market capitalization of $1.88 billion, a price-to-earnings ratio of 22.83, and a beta of 1.16 [4] - The company has a return on equity of 20.94% and a net margin of 4.52% [3] - The stock's 52-week range is between $49.08 and $130.97, with a 50-day simple moving average of $120.49 and a 200-day simple moving average of $102.58 [4] Insider Transactions - Senior Vice President John Jay Jeffery sold 2,000 shares at an average price of $125.43, totaling $250,860, reducing his ownership by 9.09% [5] - Chief Marketing Officer Paz Maestas sold 5,000 shares at an average price of $120.11, totaling $600,550, representing a 0.83% decrease in ownership [5] - Insiders sold a total of 41,316 shares worth $4,960,704 in the last quarter, with company insiders owning 22.70% of the stock [5] Institutional Holdings - Osaic Holdings Inc. increased its stake by 6.7%, now owning 11,644 shares valued at $1.02 million [6] - Public Sector Pension Investment Board raised its holdings by 7.4%, owning 43,343 shares valued at $3.799 million [6] - Institutional investors collectively own 74.82% of DXP Enterprises' stock [6] Analyst Ratings - Singular Research upgraded DXP Enterprises to a "moderate buy" rating, while Wall Street Zen downgraded it from "strong-buy" to "buy" [7] - Weiss Ratings maintained a "buy (b)" rating, with a consensus rating of "Buy" and a price target of $95.00 [7] Company Overview - DXP Enterprises, Inc. distributes maintenance, repair, and operating (MRO) products and services in the U.S. and Canada, operating through three segments: Service Centers, Supply Chain Services, and Innovative Pumping Solutions [8]

Core Insights - The company's shares have experienced strong growth over the past year, significantly outperforming the S&P 500 index [1] Group 1: Share Performance - The shares are considered to be ahead of the S&P 500, indicating a robust performance relative to the broader market [1] - Despite the strong growth, there is a consideration that the shares may be overvalued for a moderately performing company [1]

Core Insights - DXP Enterprises, Inc. has completed the acquisition of APSCO, LLC, enhancing its water and wastewater platform [1][3] - APSCO, founded in 1986, is a leading manufacturer's representative in the water and wastewater industry, servicing multiple states [2][4] - The acquisition was funded with cash from DXP's balance sheet, indicating a strategic investment in expanding its market presence [2][5] Financial Summary - APSCO reported sales of approximately $12.9 million and adjusted EBITDA of $1.5 million for the twelve months ending July 31, 2025 [4] - Adjusted EBITDA is defined as income before tax, plus interest, depreciation, amortization, and non-recurring items, minus go-forward selling costs [4] Strategic Implications - The acquisition is expected to enhance DXP's product and aftermarket service capabilities, contributing to the growth of its DXP Water platform [3][5] - DXP aims to continue its acquisition strategy in the water and wastewater sector, with plans for further acquisitions into 2026 [5]

Group 1 - DXP Enterprises Inc. shares are currently trading at $116.12, reflecting a 1.78% decrease in the current session and a 7.02% decrease over the past month, while showing a significant increase of 120.26% over the past year [1] - The company's price-to-earnings (P/E) ratio is 22.6, which is lower than the aggregate P/E ratio of 44.27 in the Trading Companies & Distributors industry, suggesting that shareholders may perceive the stock as underperforming compared to its peers or potentially undervalued [5] - The P/E ratio serves as a tool for long-term shareholders to evaluate market performance against historical earnings and industry standards, with a lower P/E possibly indicating weak future performance expectations or undervaluation [4] Group 2 - While the P/E ratio is a useful metric for assessing a company's market performance, it should be interpreted cautiously, as a low P/E can indicate either undervaluation or weak growth prospects [8] - Investors are encouraged to consider the P/E ratio alongside other financial metrics, industry trends, and qualitative factors to make informed investment decisions [8]

Group 1 - Mr. Mavroudis is a professional portfolio manager with expertise in institutional and private portfolios, focusing on risk management and financial market analysis [1] - He has successfully navigated major crises, including the COVID-19 pandemic and the PSI, demonstrating resilience in portfolio management [1] - Mr. Mavroudis is the CEO of FAST FINANCE Investment Services, a registered Greek company, and holds multiple advanced degrees in finance, law, and economics [1] Group 2 - He is a certified portfolio manager and has various certifications related to financial instruments, derivatives, and securities market-making [1] - Mr. Mavroudis engages with the investment community through writing on Seeking Alpha, aiming to share insights and learn from others [1]