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HD Supply Holdings’ Performance in the Competitive Market

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Sep. 14 2015, Published 12:46 p.m. ET

Comparison of HD Supply Holdings with its peers

The analysis of HD Supply Holdings’ 2Q15 income statement follows:

  • The gross profit margins of HD Supply Holdings (HDS), W.W. Grainger (GWW), Fastenal Company (FAST), Anixter International (AXE), and MSC Industrial Direct Company (MSM) are 33.10%, 42.55%, 50.32%, 22.22%, and 45.40%, respectively.

The analysis of the company’s 2Q15 balance sheet follows:

  • The current ratios of HD Supply Holdings (HDS), W.W. Grainger (GWW), Fastenal Company (FAST), Anixter International (AXE), and MSC Industrial Direct Company (MSM) are 2.10, 3.37, 4.19, 2.39, and 2.24, respectively.

HD Supply Holdings’ valuation in 2Q15 follows:

  • The PE (price-to-earnings) ratios of HD Supply Holdings (HDS), W.W. Grainger (GWW), Fastenal Company (FAST), Anixter International (AXE), and MSC Industrial Direct Company (MSM) are 26.85x, 18.86x, 21.77x, 14.16x, and 17.65x, respectively.

Based on gross profit margin and current ratio, HD Supply Holdings’ competitors have outperformed the company. However, based on PE ratio, HD Supply Holdings has outperformed its competitors.

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ETFs that invest in HD Supply Holdings

The Renaissance IPO ETF (IPO) invests 2.59% of its holdings in HD Supply Holdings. This ETF tracks a market cap–weighted index of recent US-listed IPOs. This fund acquires issues within 90 days or sooner after IPO and sells after two years.

The First Trust Industrials/Producer Durables AlphaDEX ETF (FXR) invests 1.43% of its holdings in HD Supply Holdings. This ETF tracks a quant-driven, tiered, equal-weighted index that selects US industrial stocks likely to outperform the sector.

The First Trust US IPO (FPX) invests 0.57% of its holdings in HD Supply Holdings. This ETF tracks a market cap–weighted index of the 100 largest US IPOs over the first 1,000 trading days of each stock. Stocks must pass additional quantitative screens to make it into the index.

Comparison of HD Supply Holdings with its ETFs

The year-to-date price movements of HD Supply Holdings (HDS), the Renaissance IPO ETF (IPO), the First Trust Industrials/Producer Durables AlphaDEX ETF (FXR), and the First Trust US IPO (FPX) are 10.17%, -6.71%, -8.90%, and 3.33%, respectively.

The PE (price-to-earnings) ratios of HD Supply Holdings (HDS), the Renaissance IPO ETF (IPO), the First Trust Industrials/Producer Durables AlphaDEX ETF (FXR), and the First Trust US IPO ETF (FPX) are 26.85x, 50.95x, 16.28x, and 28.13x, respectively.

Based on price movement, HD Supply Holdings has outperformed its ETF. However, the Renaissance IPO ETF (IPO) has outperformed HD Supply Holdings based on PE ratio.

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