As we edge closer to the new year, investors may want to pay attention to several industrial products sector stocks that look poised to have a strong fiscal 2025.  Now appears to be an ideal time to buy these top-rated industrial products stocks based on the trend of positive earnings estimate revisions.  DXP Enterprises - DXPE Zacks Rank #1 (Strong Buy) With its stock hovering near 52-week highs we’ll start with DXP Enterprises (DXPE) , a global provider of pumping solutions, supply chain services, and mai ...

Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, December 16th:DXP Enterprises (DXPE) : This leading products and service distributor that adds value and total cost savings solutions to industrial customers throughout the United States, Canada, Mexico and Dubai, has a Zacks Rank #1(Strong Buy), and witnessed the Zacks Consensus Estimate for its current year earnings increasing 14.3% over the last 60 days.DXP Enterprises’ shares gained 52.1% over the la ...

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.While many investors like to look for moment ...

Steven Cress Background and Expertise - Steven Cress is the VP of Quantitative Strategy and Market Data at Seeking Alpha, responsible for creating the platform's quantitative stock rating system and analytical tools [1] - He is the Founder and Co-Manager of Alpha Picks, a systematic stock recommendation tool aimed at helping long-term investors build high-quality portfolios [1] - Cress has over 30 years of experience in equity research, quantitative strategies, and portfolio management, making him a seasoned expert in investment topics [4] Professional Achievements and Contributions - Cress founded CressCap Investment Research, which was acquired by Seeking Alpha in 2018 for its exceptional quantitative analysis and market data capabilities [3] - He previously founded Cress Capital Management, a quantitative hedge fund, and held leadership roles at Morgan Stanley and Northern Trust [3] - His work focuses on eliminating emotional biases in investment decisions through data-driven approaches and sophisticated algorithms [2] Tools and Systems Developed - Cress developed the Seeking Alpha Quant Rating system, which interprets data to provide investment insights and save time for users [1] - He created a daily updated grading system for stock trading recommendations, simplifying complex investment research [2]

Sales Performance - For the nine months ended September 30, 2024, DXP reported total sales of approximately $1,331.1 million, an increase of 4.7% compared to $1,271.6 million for the same period in 2023[89]. - Organic sales for the three months ended September 30, 2024, were $444.4 million, up 7.0% from $415.4 million in the same period of 2023[89]. - The Service Centers segment generated sales of $911.8 million for the nine months ended September 30, 2024, compared to $914.1 million in 2023, reflecting a slight decrease[89]. - The Innovative Pumping Solutions segment saw sales increase to $225.4 million for the nine months ended September 30, 2024, up from $158.4 million in 2023, representing a growth of 42.2%[89]. - The Supply Chain Services segment reported sales of approximately $193.9 million for the nine months ended September 30, 2024, a decrease of 2.6% compared to $199.0 million in 2023[97]. - Sales for the three months ended September 30, 2024, increased by $53.7 million, or 12.8%, to approximately $472.9 million from $419.2 million for the prior year's corresponding period[100]. - The Service Centers segment saw sales increase by $22.4 million, or 7.6%, primarily due to job timing and a recent acquisition contributing $13.0 million[101]. - The Innovative Pumping Solutions segment experienced a sales increase of $30.9 million, or 52.3%, driven by project-related work and $15.6 million from recent acquisitions[102]. - For the nine months ended September 30, 2024, sales increased by $59.6 million, or 4.7%, to approximately $1,331.1 million, with the Innovative Pumping Solutions segment contributing $67.0 million to this growth[108]. Profitability and Expenses - Gross profit for the three months ended September 30, 2024, was $146.1 million, resulting in a gross profit margin of 30.9%, compared to $125.6 million and 29.9% in the same period of 2023[89]. - Adjusted EBITDA for the three months ended September 30, 2024, was $52.4 million, with an adjusted EBITDA margin of 11.1%, compared to $44.0 million and 10.5% in the same period of 2023[89]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $141.0 million, up from $132.4 million in the prior year, reflecting a growth of approximately 6.4%[121]. - Selling, general and administrative expenses (SG&A) for the three months ended September 30, 2024, increased by $16.8 million, or 18.7%, to $106.5 million, mainly due to higher payroll and related expenses[104]. - SG&A for the nine months ended September 30, 2024, increased by approximately $28.0 million, or 10.2%, to $301.7 million, reflecting increased business activity[113]. - Operating income for the third quarter of 2024 increased by $3.8 million to $39.6 million, attributed to the increase in sales during the period[105]. Cash Flow and Liquidity - Free cash flow for the three months ended September 30, 2024, was $24.4 million, down from $38.3 million in the same period of 2023[89]. - The Company generated $70.1 million in cash from operating activities during the nine months ended September 30, 2024, compared to $63.8 million in the prior year, marking an increase of 3.9%[128]. - Free Cash Flow for the three months ended September 30, 2024, was $24.4 million, compared to $38.3 million in the same period of 2023, indicating a decrease of 36.3%[123]. - Net cash used in investing activities for the nine months ended September 30, 2024, was $165.1 million, significantly higher than $16.0 million in the same period of 2023, primarily due to acquisition activity[130]. - The Company had available cash of $35.0 million and credit facility availability of $131.6 million as of September 30, 2024[125]. - The Company expects to maintain adequate funding and liquidity to meet normal working capital needs over the next twelve months[139]. Debt and Financial Ratios - Interest expense for the third quarter of 2024 rose by $3.0 million, primarily due to an additional $125.0 million borrowed on the Term Loan[106]. - The Fixed Charge Coverage Ratio as of September 30, 2024, was 1.72 to 1.00, indicating compliance with financial covenants[133]. - The Secured Leverage Ratio as of September 30, 2024, was 2.54 to 1.00, below the required threshold of 5.50 to 1.00[135]. Future Outlook - DXP anticipates consistent demand across all end markets moving forward, supported by price increases from vendors and acquisition activities[96]. - Recent acquisitions contributed approximately $40.5 million in sales within the water and wastewater markets for the nine months ended September 30, 2024[96]. - The Company plans to pursue additional acquisition targets, primarily funded through cash flows from operations and borrowings[138]. - The effective tax rate for the three months ended September 30, 2024, was 11.1%, a decrease from 26.3% in the prior year, influenced by research and development tax credits[107]. - The effective tax rate for the nine months ended September 30, 2024, was 21.1%, down from 26.8% in the prior year, also due to research and development tax credits[116]. - Net income attributable to DXP Enterprises, Inc. for the three months ended September 30, 2024, was $21.1 million, compared to $16.2 million for the same period in 2023, representing a 30% increase[121].

NEWS RELEASE CONTACT: Kent Yee Senior Vice President, CFO 713-996-4700 www.dxpe.com DXP ENTERPRISES, INC. REPORTS THIRD QUARTER 2024 RESULTS • $35.0 million in cash • $472.9 million in sales, a 6.1 percent sequential and 12.8 percent year-over-year increase • GAAP diluted EPS of $1.27 • $52.4 million in earnings before interest, taxes, depreciation & amortization and other non-cash charges ("Adjusted EBITDA") • Free Cash Flow of $24.4 million for the quarter, and $54.4 million for the nine months ended Sept ...

Financial Data and Key Metrics - Total sales for Q3 2024 increased by 12.8% year-over-year to $472.9 million, with adjusted EBITDA of $52.4 million, up 19.1% year-over-year [8][19] - Year-to-date sales through September 30 increased by 4.7%, with adjusted EBITDA up 6.5% [7] - Gross profit margins improved by 94 basis points to 30.9% in Q3 2024 compared to Q3 2023 [17] - Operating income margin was 8.4% in Q3 2024, a slight decline of 18 basis points compared to Q3 2023 [18] - Earnings per diluted share for Q3 2024 was $1.27, up from $0.93 in Q3 2023 [37] Business Segment Performance - **Innovative Pumping Solutions (IPS):** Sales grew 52.3% year-over-year to $89.8 million, driven by strong performance in energy and water-related projects [8][9] - **Service Centers:** Sales increased 7.6% year-over-year to $316.8 million, with operating income margins of 14.6% [8][19] - **Supply Chain Services (SCS):** Sales grew 0.7% year-over-year to $66.2 million, with operating income margins of 8.4% [8][19] - DXP Water now represents 45% of IPS sales, up from 31% in the previous year [9] Market Performance - Energy-related backlog grew 39.1% sequentially in Q3 2024, with significant project wins expected to impact revenue in Q1 or Q2 of 2025 [27] - Water and wastewater-related backlog also showed strong growth, driven by both organic and acquisition-related additions [28] - Regional growth was observed in North Central, North Texas, South Rockies, Southwest, and Canadian rotating equipment markets [13] Strategic Direction and Industry Competition - The company is focused on driving organic and acquisition growth, improving gross profit margins, and increasing productivity [6] - DXP is diversifying its business to reduce cyclicality, with a strong emphasis on water and wastewater projects, which now represent a significant portion of IPS sales [9][10] - The company has closed seven acquisitions year-to-date, with plans to close at least two more by the end of Q1 2025 [44] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about the future, citing strong demand in end markets and a robust acquisition pipeline [6][20] - The company expects to maintain double-digit EBITDA margins and continue growing sales above market rates [20][22] - DXP is investing in technology and processes to improve efficiency and support long-term growth [17] Other Important Information - The company has remediated all material weaknesses in its financial controls as of Q3 2024 [45] - DXP repurchased $5 million worth of shares in Q3 and has a new $85 million share repurchase program in place [44] - Free cash flow for Q3 was $24.4 million, down from $38.3 million in Q3 2023, primarily due to investments in project work [41] Q&A Session Summary Question: Acquisition Pipeline and Recent Deals - The company closed five acquisitions by the end of Q3 and two more in October, bringing the total to seven year-to-date [47] - Two additional acquisitions are expected to close by the end of Q1 2025 [47] - Recent acquisitions include a water wastewater business in Nebraska and a vacuum pump business in California [48] Question: Q4 Revenue Expectations - Management expects Q4 revenue to be softer historically, with fewer billing days due to holidays [51] - Sales per business day trend shows variability, with September reaching $8.77 million per day, but October dropping to $6.99 million per day [50] Question: EBITDA Margins and Operating Tailwinds - Adjusted EBITDA margins are expected to remain in the double digits, supported by growth in water and wastewater projects and accretive acquisitions [55] - SG&A expenses are expected to remain elevated as the company invests in growth initiatives [55] Question: Debt Refinancing and Interest Expense - The company reduced borrowing costs by 100 basis points in October, with run-rate interest expense expected to remain around $15.5 million to $16 million per quarter [57] Question: Portfolio Diversification and Potential Divestitures - Management is open to divesting parts of the portfolio that no longer align with the company's strategic direction, though no immediate plans are in place [60][62] Question: Capital Allocation and Seller Expectations - Seller valuations remain reasonable, and the company continues to focus on strategic acquisitions that align with its growth objectives [58]

We are in one of the busiest weeks of the current reporting cycle, and betting on stocks based on profit numbers and earnings surprises is in trend. But looking beyond profits and figuring out a company's cash position can be far more rewarding. In this regard, stocks like Limbach Holdings, Inc. (LMB) , DXP Enterprises, Inc. (DXPE) , Lands' End, Inc. (LE) and Euroseas Ltd. (ESEA) are worth buying. Even though profit is a company's goal, cash is necessary for its existence, development and success, and it is ...

In the latest market close, DXP Enterprises (DXPE) reached $49.40, with a +0.06% movement compared to the previous day. The stock's performance was behind the S&P 500's daily gain of 0.16%. Meanwhile, the Dow experienced a drop of 0.37%, and the technology-dominated Nasdaq saw an increase of 0.78%. Shares of the industrial products supplier witnessed a loss of 7.48% over the previous month, trailing the performance of the Industrial Products sector with its loss of 0.89% and the S&P 500's gain of 1.67%. The ...

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks. Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks. Luckily, Za ...