Seeking Alpha: Even With The Debt, WESCO Is Interesting

I'm well aware that not everyone uses discounted cash flow to analyze and value stocks, and that's perfectly fine. Not only is there no such thing as "one right way", but using different methods in tandem can tell you some interesting things about a stock. Along those lines, WESCO (WCC) looks like a pretty interesting value if you compare its EV/EBITDA multiple to other distributors and perhaps even cheap if you go with a PEG-based approach.

The problem I have with earnings/PE approaches, though, is that I happen to think that debt matters. And WESCO has a lot of that. So I'm torn - WESCO has more than enough cash flow and operating income to cover its interest expense and debt service, and the company's debt load is not likely to undermine its leverage to a rebound in commercial construction or utility spending. Given that Wall Street often just ignores debt when there is revenue growth and margin leverage to focus on, I'm not going to rule out the possibility of further gains in WESCO's share price, even though netting out the debt would normally generate an uninspiring fair value target.

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Even With The Debt, WESCO Is Interesting