HD Supply (HDS) Shares Up 6.3% on Strong Earnings

Shares of HD Supply Holdings Inc (NASDAQ:HDS) shot up 6.3% during mid-day trading on Tuesday following a stronger than expected earnings report. The stock traded as high as $40.26 and last traded at $38.80. 8,922,918 shares were traded during mid-day trading, an increase of 228% from the average session volume of 2,720,937 shares. The stock had previously closed at $36.49.

The industrial products company reported $0.80 earnings per share for the quarter, beating analysts’ consensus estimates of $0.65 by $0.15. HD Supply had a net margin of 9.31% and a return on equity of 49.76%. The company had revenue of $1.37 billion during the quarter, compared to analyst estimates of $1.34 billion. During the same quarter last year, the business posted $0.83 EPS. The firm’s revenue for the quarter was up 7.5% on a year-over-year basis.

HD Supply announced that its Board of Directors has authorized a share repurchase plan on Tuesday, August 29th that authorizes the company to buyback $500.00 million in shares. This buyback authorization authorizes the industrial products company to reacquire shares of its stock through open market purchases. Stock buyback plans are generally a sign that the company’s board of directors believes its stock is undervalued.

A number of brokerages recently weighed in on HDS. Goldman Sachs Group reiterated a “neutral” rating and set a $35.00 price objective on shares of HD Supply in a report on Wednesday, August 16th. ValuEngine upgraded shares of HD Supply from a “hold” rating to a “buy” rating in a report on Tuesday. BidaskClub upgraded shares of HD Supply from a “sell” rating to a “hold” rating in a report on Friday, September 1st. Zacks Investment Research upgraded shares of HD Supply from a “hold” rating to a “buy” rating and set a $35.00 price objective for the company in a report on Friday, August 25th. Finally, Morgan Stanley reiterated an “equal weight” rating and set a $38.00 price objective (up previously from $37.00) on shares of HD Supply in a report on Monday, October 2nd. Thirteen equities research analysts have rated the stock with a hold rating and five have assigned a buy rating to the company. The stock has an average rating of “Hold” and a consensus price target of $38.15.

Hedge funds and other institutional investors have recently bought and sold shares of the business. Bank of Montreal Can grew its position in shares of HD Supply by 865.7% in the 2nd quarter. Bank of Montreal Can now owns 15,046 shares of the industrial products company’s stock worth $461,000 after buying an additional 13,488 shares during the last quarter. Creative Planning grew its position in shares of HD Supply by 15.2% in the 2nd quarter. Creative Planning now owns 3,800 shares of the industrial products company’s stock worth $116,000 after buying an additional 500 shares during the last quarter. Aperio Group LLC grew its position in shares of HD Supply by 8.0% in the 2nd quarter. Aperio Group LLC now owns 35,206 shares of the industrial products company’s stock worth $1,078,000 after buying an additional 2,613 shares during the last quarter. Shell Asset Management Co. grew its position in shares of HD Supply by 97.5% in the 2nd quarter. Shell Asset Management Co. now owns 17,274 shares of the industrial products company’s stock worth $529,000 after buying an additional 8,529 shares during the last quarter. Finally, Sumitomo Mitsui Asset Management Company LTD purchased a new position in shares of HD Supply in the 2nd quarter worth approximately $425,000.

The company has a quick ratio of 1.41, a current ratio of 2.04 and a debt-to-equity ratio of 3.57. The firm has a market capitalization of $7,350.00, a PE ratio of 14.26, a PEG ratio of 0.82 and a beta of 1.40.

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About HD Supply

HD Supply Holdings, Inc is an industrial distributor in North America. The Company’s segments include Facilities Maintenance, Construction & Industrial-White Cap, and Corporate. As of January 29, 2017, the Company operated through approximately 500 locations across 48 states in the United States and six Canadian provinces.

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