CSW Industrials: Shares Are Getting Expensive

Daniel JonesInvesting Group LeaderFollow5ShareSavePlay(8min)CommentsSummaryCSW Industrials has surged 24.2% since October, far outpacing the S&P 500, driven by major acquisitions.Recent revenue growth is entirely acquisition-fueled; organic sales declined due to weak energy and rail end markets.Profitability is pressured: gross margin contracted, net profit fell to $10.3M, and operating costs rose sharply.Despite strong historical growth, CSWI now trades at lofty multiples; I maintain a 'hold' rating but am close to downgrading.Looking for a helping hand in the market? Members of Crude Value Insights get exclusive ideas and guidance to navigate any climate. Learn More » AP Chanel/E+ via Getty Images The last few months have been a really great time for shareholders of CSW Industrials, Inc. (CSW). Back in early October of last year, I acknowledged that the company was going throughThis article was written byDaniel Jones36.68K FollowersFollowDaniel is an avid and active professional investor. He runs Crude Value Insights, a value-oriented newsletter aimed at analyzing the cash flows and assessing the value of companies in the oil and gas space. His primary focus is on finding businesses that are trading at a significant discount to their intrinsic value by employing a combination of Benjamin Graham's investment philosophy and a contrarian approach to the market and the securities therein. Learn more.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.