Dutton Associates continues its coverage of DXP Enterprises (Nasdaq:DXPE) maintaining a Buy rating and a target price of $60. The 10-page report by Dutton senior analyst Paul J. Resnik, CFA is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, and Knobias, and other leading financial portals.
DXP Enterprises has proven its ability to grow within the industrial supply sector both by internal growth and through acquisitions. The Company’s $106 million acquisition of Precision Industries, completed last September, was a major development for DXP. However, it did not signal the end, or even a slowing down, of the Company’s acquisition strategy. DXP made additional acquisitions in November and February. We believe that these additions, the phase in of major new clients at Precision, continued strength in the energy sector, and ongoing market share gains should enable DXP to weather choppy economic waters this year. We project 2008 earnings per share of $3.57 versus $2.71 in 2007 (up from $2.08 in 2006). Based on a projected price/earnings ratio of 17 times estimated 2008 EPS, we have set a 12-month price target for the stock of $60. The stock has risen 7% since being upgraded to Strong Buy on January 14 while the S&P 500 Index has dropped 2%. Still, our price target remains about 45% above the current price of the stock, and we reiterate our Strong Buy rating.
About Dutton Associates
Dutton Associates is one of the largest independent investment research firms in the U.S. Its 30 senior analysts are primarily CFAs and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.
The cost of enrollment in our one-year continuing research program is US $39,500 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $90,000 from the Company for 12 Research Reports with coverage commencing on 6/21/04. The Firm does not accept any equity compensation. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.
Dutton Associates
John M. Dutton, President, 916-960-0623
