HDS - An HD Supply Refocused On Facilities MRO And More Reasonably Valued Is A More Interesting Story
HD Supply (HDS) is, I believe, another example of how sooner or later valuation always matters. While this is a well-run industrial distributor with a lot of positive attributes, the valuation has historically been quite generous, as the Street was all-in on the “growth by M&A/consolidation” story, as well as improved margin leverage through scale. While the company has done pretty well operationally, the shares have sported only a mid-single-digit return (annualized) over the last five years due to what I believe was an inflated starting point.
There’s still a lot to like