HDS

HD Supply Holdings Inc

Consumer, Event Driven/Special Sit


Presented:08/07/2017
Price:$31.81
Cap:$6.46B
Current Price:$55.99
Cap:$8.69B

Presented

Date08/07/2017
Price$31.81
Market Cap$6.46B
Ent Value$11.84B
P/E Ratio21.39x
Book Value$5.54
Div Yield0%
Shares O/S203.02M
Ave Daily Vol4,304,799
Short Int1.81%

Current

Price$55.99
Market Cap$8.69B
HD Supply Holdings, Inc. engages in the distribution of construction and industrial products. It operates through the following segments: Facilities Maintenance, Waterworks, and Construction & Industrial-White Cap. The Facilities Maintenance segment includes distribution maintenance, repair and operations products, provision of value-added services, and fabrication of custom products. Its products include electrical and lighting items, plumbing, HVAC products, appliances, janitorial supplies, hardware, kitchen and bath cabinets, window coverings, textiles and guest amenities, healthcare maintenance, and water and wastewater treatment products. The Waterworks segment involves the sale of water and wastewater transmission products including pipes, fittings, valves, hydrants, and meters. The Construction & Industrial-White Cap segment comprises tilt-up brace systems, forming and shoring systems, concrete chemicals, hand and power tools, cutting tools, rebar, ladders, safety and fall arrest equipment, screws and fasteners, sealants and adhesives, drainage pipes, sediment, and erosion control equipment. The company is headquartered in Atlanta, GA.

Publicly traded companies mentioned herein: Amazon.com Inc (AMZN) HD Supply Holdings Inc (HDS), Home Depot Inc (HD), Lowe’s Companies Inc (LOW), Ferguson PLC (FERG LN)

Highlights

The presenter is long shares of HD Supply (HDS), viewing the sale of Waterworks and subsequent sell-off in the stock as a good buying opportunity. He believes the remaining business is fundamentally healthy, and thinks concerns over Amazon encroaching on the space are unwarranted. By his model, HDS RemainCo will be trading at 13x forward cash flow, has the balance sheet flexibility to continue share repurchases, and would be worth up to $60 per share in an acquisition scenario.

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Idea Discussion

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