Hardwoods Distribution Inc (HDI)

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Hi

General growth potential and valuation Insights on this company “Hardwoods Distribution Inc (HDI)”?

Recent quarter had record results. Recent acquisition of Novo Building Products looks promising.

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Asked on September 12, 2021 7:41 pm
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Private answer

HI Jason,

Yes, Hardwoods Distribution recent acquisition does look quite promising.

In terms of growth prospects, it is expected to have a big year this year with triple digit earnings growth and 50% revenue growth but that is mainly spurred by recent acquisition. Next year, earnings are expected to dip and revenue is expected to jump by 22% in large part due to the timing of acquisitions. Interestingly, earnings are also expected to dip in 2023 but there are currently no revenue estimates.

In terms of valuation, the company is fairly valued here. It is trading inline with historical averages. While its forward P/E looks cheap, one must take into account the fact that earnings are expected to dip. Overall though, i like the company and think it should do pretty well. Of not, it is prone to pullbacks after run ups, so something worth monitoring.

Mat

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Posted by Mathieu Litalien
Answered on September 13, 2021 5:26 am