HEES - Choice Equities - H&E Equipment Services: Market Fails To Appreciate Growth Prospects

2024-05-01 07:30:00 ET

Summary

• H&E Equipment Services has ample scale to demonstrate pricing power in markets that primarily operate based on local market share dynamics.
• This industry structure provides scale benefits to HEES but also suggests small bolt-on acquisitions can move the needle on company financials.
• It appears the market fails to appreciate the company’s growth prospects, but has also perhaps overlooked its somewhat recent transition to a high-margin pure play rental company.

The following segment was excerpted from this fund letter.

H&E Equipment Services, Inc. ( HEES )

H&E Equipment Services, Inc. is one of the top equipment rental companies in the U.S., providing construction and industrial related equipment, parts, and services in 30 states to the commercial, industrial, infrastructure and residential construction markets. As the #4 player in a business geared towards local economics with a strong presence focused in the industrially active region of the Sun Belt in the US, the company has ample scale to demonstrate pricing power in markets that primarily operate based on local market share dynamics....

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