CSW Industrials Diversified Growth Becomes Stronger; Wunderlich Initiates Coverage

Wunderlich's Liam Burke initiated coverage on CSW Industrials Inc CSWI with a Buy rating and a price target of $42.00 as the company's diversified industrial growth story becomes stronger.

CSW Industrials offers specialty products and chemicals in HVAC, railroad, energy, mining and general industrials. The premium products offered by CSW Industrials enables the company to charge a premium and generate large operating margins.

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The company's diversified portfolio translates into "stable revenue streams and solid earnings growth," Burke noted. CSW Industrial's products have diverse applications in broad industry categories. The company is able to produce consistent cash flow as weak demand in oil and gas is propped up by healthier market demand in HVAC and construction.

"The company is looking to drive long-term revenue growth by adding new products and applications to its niche business through accretive acquisitions," Burke stated. Acquisitions are a crucial part of CSW's growth strategy. The company acquires commercially proven product lines with limited distribution allowing CSW to add "complementary technologies and sell a broader product line," while simultaneously benefiting from the company's proven distribution infrastructure.