NEW YORK ( TheStreet) -- TheStreet's Debra Borchardt is with Francis Gaskins, director of research for Equities.com, to take a closer look at one of the IPOs this week.

HD Supply Holdings ( HDS) is the biggest IPO of the week with an offering size of about $1.25 billion. Shares are priced in the range of $22.50-$24.50.

The company was once part of Home Depot ( HD), before being sold to a private-equity firm, Borchardt noted. That firm is now taking the company public.

With a strong housing market recovery in place, many might think that this could be a hot IPO, but as Gaskins was quick to point out, if rates continue to rise, this will likely hurt the recovery.

On the valuation side of things, HD Supply Holdings is actually undervalued compared with peers such as Fastenal ( FAST) and W.W. Grainger ( GWW) on a price-to-sales and price-to-earnings comparison.

Gaskins concluded that if the stock prices at the lower end of its range, it could be very interesting for investors.
Bret Kenwell currently writes, blogs and also contributes to Rocco Pendola's Weekly Options Newsletter. Focuses on short- to intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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