NEW YORK ( TheStreet) -- DXP (Nasdaq: DXPE) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, notable return on equity, solid stock price performance and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- Powered by its strong earnings growth of 110.15% and other important driving factors, this stock has surged by 61.16% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Trading Companies & Distributors industry and the overall market, DXP ENTERPRISES INC's return on equity exceeds that of both the industry average and the S&P 500.
- DXPE's revenue growth trails the industry average of 47.1%. Since the same quarter one year prior, revenues rose by 23.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DXP ENTERPRISES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, DXP ENTERPRISES INC turned its bottom line around by earning $1.32 versus -$3.27 in the prior year. This year, the market expects an improvement in earnings ($1.71 versus $1.32).