Seeking Alpha: Wall Street Slow To Abandon HD Supply's Long-Term Story

Covering HD Supply's (HDS) first quarter, I thought that the company was a solid collection of assets with real upside to a recovery in construction and internal operating margin improvement, but I thought the valuation was a little rich. I remarked that the shares would be more interesting at $20, and sure enough investors had a couple of days in which they could have bought below that level.

Since then the shares are up 10% even though the company is not doing particularly well staying on target with respect to sell-side estimates. Even though the company reset revenue expectations lower once again, and a change in CFOs so soon after an IPO is alarming, it looks like investors are more focused on the EBITDA margin improvement and the long-term prospects. I still believe that there are better options in the distribution sector, but I'll also acknowledge that Wall Street *wants* to like this story and there's room for both operating results and multiples to head higher.

Please follow this link for the full Seeking Alpha article:
Wall Street Slow To Abandon HD Supply's Long-Term Story