4. WESCO International, Inc. (NYSE:WCC)
Number of Hedge Fund Holders: 50
Forward Price to Earnings Multiple: 13.26
Baupost Group’s Holdings: $211.32 Million
WESCO International, Inc. (NYSE:WCC) is an industrial company that provides business-to-business distribution, logistics services, and supply chain solutions. It supplies products and supply chain solutions, including electrical equipment and supplies, automation and connected devices. While the company operates in over 50 countries and offers over 1.5 million products, it has embarked on an aggressive acquisition spree to strengthen its long-term prospects.
WESCO International, Inc. (NYSE:WCC) has already completed the acquisition of entroCIM, a data centre and building intelligence Software Company. The acquisition demonstrates the broader range of services, data-driven insights, and knowledge Wesco plans to offer its international clientele and supplier partners to boost supply chain value. With the acquisition, the company should also pursue growth opportunities around generative artificial intelligence with the provision of data center services.
WESCO International, Inc. (NYSE:WCC) has also inked a deal to acquire Storeroom Logix to strengthen its prospects of providing asset and inventory management software. As a leading provider of photovoltaic modules and load-balancing equipment, the company is well-positioned to capitalize on the growing demand for electric vehicles, solar energy installation, and data center expansion. The tremendous opportunities for growth is one reason analysts at RBC Capital expect the company to post organic sales growth of 1.6%, driven by growth in electrical & electronic solutions, communications & security solutions and data centre demand.
Here is what Blue Tower Asset Management stated the following regarding WESCO International, Inc. (NYSE:WCC) in its Q3 2024 investor letter:
“In this letter, I will be exploring our holding in WESCO International, Inc. (NYSE:WCC), an electric infrastructure, component, and communication equipment distributor. These distributors are another indirect way to profit from the ongoing boom in solar technology, electric vehicles, and AI technology. Despite the big boost that these technology trends should provide to these distributor businesses, these distributors are not trading at the expensive multiples of AI-related stocks. While most electronic component distributors are benefitting from these trends, Wesco is still realizing the integration benefits from a major 2020 merger and is more leveraged than peers.
Wesco originated in the Westinghouse Electric and Manufacturing Company in 1922, where it was originally the distribution arm of Westinghouse’s electrical and industrial products.
On February 1, 1994, private equity firm Clayton, Dubilier & Rice (CD&R) purchased Wesco from Westinghouse in a $340M leveraged buyout. Wesco was again sold just 4 years later to The Cypress Group, which created the holding company Wesco International. In 1999, the company went public. Over the past 20 years, Wesco engaged in over a dozen acquisitions, growing the scale and geographic scope of the company. In 2020, Wesco completed its largest acquisition with the takeover of Anixter International when it used a combination of cash, Wesco shares, and preferred stock to beat out an offer from CD&R…” (Click here to read the full text)
