Distribution Solutions Group (NASDAQ:DSGR) Shares Gap Up – Here’s Why

Shares of Distribution Solutions Group, Inc. (NASDAQ:DSGR) gapped up prior to trading on Friday . The stock had previously closed at $27.48, but opened at $34.42. Distribution Solutions Group shares last traded at $34.4550, with a volume of 22,516 shares trading hands.

Distribution Solutions Group News Roundup

Here are the key news stories impacting Distribution Solutions Group this week:

• Positive Sentiment: DSGR agreed to be acquired by affiliates of LKCM Headwater Investments for $35.00 per share in cash, giving investors a clear exit price and effectively putting a floor under the stock. Distribution Solutions Group to Be Taken Private by Affiliates of LKCM Headwater Investments for $35.00 Per Common Share in Cash
• Positive Sentiment: The merger announcement likely explains the stock’s strength, as shares are trading close to the deal value and volume has picked up on the news.
• Neutral Sentiment: TestEquity, a DSGR business, announced expanded environmental chamber sales representation across the Midwest, which is modestly supportive but not likely a major stock driver by itself. TestEquity Expands Environmental Chamber Sales Reach with Millennium Alliance Representation Across the Midwest
• Negative Sentiment: Stephens downgraded DSGR from strong-buy to hold, signaling less upside from an analyst perspective now that the acquisition price is largely known. Zacks.com report on Stephens downgrade
• Negative Sentiment: Multiple law firms, including Kaskela Law, Halper Sadeh, and Ademi LLP, launched investigations into whether the $35.00 per share buyout price is fair to shareholders, raising the risk of litigation and potential deal scrutiny. Kaskela Law Firm shareholder investigation

Analysts Set New Price Targets

DSGR has been the subject of a number of research analyst reports. Zacks Research lowered Distribution Solutions Group from a “hold” rating to a “strong sell” rating in a report on Thursday, June 11th. Weiss Ratings cut Distribution Solutions Group from a “hold (c-)” rating to a “sell (d+)” rating in a research note on Friday, July 10th. Stephens set a $35.00 price target on Distribution Solutions Group in a report on Thursday. Finally, Barrington Research set a $35.00 price objective on Distribution Solutions Group and gave the company a “market perform” rating in a research report on Friday. Two research analysts have rated the stock with a Hold rating and two have assigned a Sell rating to the company’s stock. According to MarketBeat, the stock has a consensus rating of “Reduce” and a consensus price target of $35.00.

Distribution Solutions Group Trading Up 0.2%

The company has a market cap of $1.59 billion, a P/E ratio of 287.50 and a beta of 0.56. The stock’s 50-day moving average is $27.65 and its two-hundred day moving average is $27.75. The company has a debt-to-equity ratio of 1.07, a current ratio of 2.63 and a quick ratio of 1.39.

Distribution Solutions Group (NASDAQ:DSGR) last issued its earnings results on Thursday, April 30th. The company reported $0.24 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.26 by ($0.02). The company had revenue of $496.00 million during the quarter, compared to analysts’ expectations of $489.30 million. Distribution Solutions Group had a return on equity of 8.49% and a net margin of 0.27%. As a group, equities research analysts predict that Distribution Solutions Group, Inc. will post 1.31 earnings per share for the current fiscal year.

Hedge Funds Weigh In On Distribution Solutions Group

Institutional investors and hedge funds have recently modified their holdings of the company. BNP Paribas Financial Markets lifted its holdings in Distribution Solutions Group by 53.5% in the second quarter. BNP Paribas Financial Markets now owns 1,170 shares of the company’s stock valued at $32,000 after acquiring an additional 408 shares during the period. Quarry LP purchased a new position in Distribution Solutions Group in the third quarter worth about $42,000. Tudor Investment Corp ET AL purchased a new position in Distribution Solutions Group in the third quarter worth about $226,000. Arrowstreet Capital Limited Partnership bought a new stake in shares of Distribution Solutions Group during the 1st quarter valued at about $229,000. Finally, R Squared Ltd bought a new stake in shares of Distribution Solutions Group during the 4th quarter valued at about $238,000. 91.64% of the stock is currently owned by hedge funds and other institutional investors.

Distribution Solutions Group Company Profile

Distribution Solutions Group, Inc, a specialty distribution company, engages in the provision of value-added distribution solutions in North America, Europe, Asia, South America, and the Middle East. The company provides its solutions to the maintenance, repair, and operations (MRO); original equipment manufacturer (OEM); and industrial technology markets. It operates through three segments: Lawson, Gexpro Services, and TestEquity. The Lawson segment distributes of specialty products and services to the industrial, commercial, institutional, and government MRO market.