Admittedly, I have a thing for the industrial/MRO distribution sector - I own MSC Industrial (MSM) and follow others like Fastenal (FAST), Grainger (GWW), and WESCO (WCC)
pretty closely. Although it's a very competitive space with a strong
cyclical component, it's a fragmented market where companies with a good
business plan (e.g. MSC Industrial and Fastenal) can really make a name
for themselves.
Into this mix comes one of the bigger dogs in the yard - HD Supply (HDS). Once part of Home Depot (HD)
and then sold to private equity, HD Supply has already enjoyed a pretty
good post-IPO run, rising about one-third since its debut. Although I
do appreciate the leverage that HD Supply offers to a U.S. construction
rebound, not to mention margin improvement and consolidation potential, I
think the multiple today is demanding unless you are really bullish on
the company's growth plans and the recovery potential of the U.S.
construction market.
Please read more here:
HD Supply An Expensive Play On Construction And MRO
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