Distribution Solutions Group, Inc.

Where It Passes

Where It Falls Short

• Valuation0% pass✗ 28▾

  All 13 investors flag DSGR's valuation

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio2.5x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)P/E 194.4x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value3.2%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=3.2%, ROC=12.2%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS194.4x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)19.3x

  ✗Dreman< 8x

  Price / Book Value per Share2.5x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=194.4x, OE Yield=4.2%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=194.4x, FCF Yield=3.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=194.4x, P/B=2.5x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share25.7x

  ✗Ackman<= 25

  Price vs. Trailing Low134% of trailing low ($26.04)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+0.70%; #3045/6340 (top 48.0%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.4104; #3227/6449 (top 50.0%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS194.4x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per ShareN/A (non-positive TBVPS)

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change-17.9%

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+1.3011; #1495/5247 (top 28.5%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+1.29%; #2356/4519 (top 52.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+28.02%; #1069/6202 (top 17.2%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Verdicts7% pass✓ 1✗ 14▾

  Split decision: 13 FAIL · 2 NEUTRAL · 1 BUY

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (1/9)✗LynchFAIL (0/7)✗GreenblattRank #1550•PiotroskiNEUTRAL (F-Score 7)✗DremanFAIL (2/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (2/5)✗AckmanFAIL (2/9)✗TempletonFAIL (2/8)✓SleepBUY (5/6)✗AsnessFAIL (Rank #857/2370 (Top 36.2%))✗NeffFAIL (2/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage8% pass✓ 3✗ 12▾

  11 of 12 flag DSGR's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current AssetsLT Debt $723.6M vs NCA $515.2M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 1.14, IC: 1.4x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity1.14

  ✗Lynch< 0.33

  Cash - Long-term Debt$-660.4M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change40.17% -> 37.98%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities2.47

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity1.14

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels1.14

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=1.4x, D/EBITDA=4.9x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity1.14

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-1.1405; #3357/4210 (top 79.7%)

  ✗AsnessTop 30% of eligible cross-section
• Profitability13% pass✓ 10✗ 25▾

  14 of 16 flag DSGR's profitability — Graham, Buffett, Lynch +11 more

  Positive EPS (10 years)12/25 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)15/25 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-0.6%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)4.0% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$68.2M

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)P/E 194.4x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR-35.6%

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE1.7%

  ✗Lynch> 15%

  EBIT / Enterprise Value3.2%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=3.2%, ROC=12.2%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets0.48%

  ✓PiotroskiROA > 0

  ROA Change YoY-0.42% -> 0.48% (delta: +0.90%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=4.80%, ROA=0.48%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY34.0% -> 33.4%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue1.0%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity1.7%

  ✗Dreman> 12%

  Margin of SafetyP/E=194.4x, P/B=2.5x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-0.4% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency15/24 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue3.5%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity1.7%

  ✗Ackman>= 15%

  5-Year EPS CAGR-35.6% CAGR over 5 years

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend2.7% (2023) -> 4.0% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 35.1% -> 33.4%, operating margin 2.7% -> 4.0%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+0.70%; #3045/6340 (top 48.0%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+36.46%; #1106/3702 (top 29.9%)

  ✓AsnessTop 30% of eligible cross-section

  Net income / positive book equity+1.71%; #2787/5226 (top 53.3%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0063; #571/5884 (top 9.7%)

  ✓AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR-35.6% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years7/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Valuation models13% pass✓ 1✗ 7▾

  Models split on DSGR at $35.00 — fair values range $7.55–$48.32

  Graham fair value$7.55

  ✗Graham-363.6% margin vs $35.00

  Buffett fair value$17.45

  ✗Buffett-100.6% margin vs $35.00

  Greenblatt fair value$10.10

  ✗Greenblatt-246.5% margin vs $35.00

  Munger fair value$24.13

  ✗Munger-45.0% margin vs $35.00

  Pabrai fair value$14.26

  ✗Pabrai-145.4% margin vs $35.00

  Akre fair value$8.14

  ✗Akre-330.0% margin vs $35.00

  Marks fair value$8.49

  ✗Marks-312.2% margin vs $35.00

  Ackman fair value$48.32

  ✓Ackman+27.6% margin vs $35.00
• Growth25% pass✓ 4✗ 9▾

  6 of 8 flag DSGR's growth — Graham, Lynch, Dreman +3 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)P/E 194.4x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR-35.6%

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 15.8% vs Rev: 6.6%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency15/24 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth14.9%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency2/5 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR-35.6% CAGR over 5 years

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 35.1% -> 33.4%, operating margin 2.7% -> 4.0%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR41.3%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR-35.6% over 5 years

  ✗Neff7%-20% annualized
• Efficiency25% pass✓ 3✗ 8▾

  6 of 8 flag DSGR's efficiency — Buffett, Greenblatt, Piotroski +3 more

  Current Ratio2.47

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)3.4%

  ✗Buffett> 10%

  ROIC - WACC-6.6%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)12.2%

  ✗Greenblatt> 25%

  Current Ratio Change YoY2.67 -> 2.56

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY1.04x -> 1.13x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities2.47

  ✓Dreman> 1.5

  Return on Invested Capital4.1%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=2.8%; FY2024: ROIC=3.2%; FY2025: ROIC=4.6%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC4.6% (RR=100% x ROIC=4.6%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 4.6%)

  ✗SleepROIC > 12% in a majority of years
• Cash Flow50% pass✓ 6✗ 6▾

  5 of 10 pass — Lynch, Dreman, Pabrai +2 more object

  Free Cash Flow Proxy$68.2M

  ✓BuffettPositive and growing

  FCF Positive and Growing$20.9M

  ✗LynchPositive and growing

  Operating Cash Flow$83.8M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=4.80%, ROA=0.48%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)19.3x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=194.4x, FCF Yield=3.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive12/17 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap1.3%

  ✗Ackman>= 4%

  Price / FCF per Share25.7x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency20/23 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$20.9M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+1.29%; #2356/4519 (top 52.1%)

  ✗OshaughnessyTop 10% of eligible cross-section