Ingram Micro: A Strong Buy - Analyst Blog
January 15 2014 - 12:40PM
Zacks
On Jan 14, 2014, Zacks Investment Research upgraded
Ingram Micro (IM) to a Zacks Rank #1 (Strong Buy).
The company’s efforts to broaden the product portfolio through
strategic distribution agreements with different manufacturers and
long-term expected earnings growth rate of 13.35% make it an
attractive investment opportunity.
Why the Upgrade?
Ingram Micro has been striking distribution deals with a number
of original equipment manufactures thus expanding its product
portfolio. Leveraging these agreements, the company had posted a
12.4% year-over-year increase in the previous quarter.
We believe that the improving IT spending trend will help Ingram
to post better results, going forward. Moreover, the company’s
focus on the high-margin market and strategic acquisitions to grow
market share are encouraging. The Brightpoint acquisition is also
expected to remain a key growth driver for the company.
Moreover, Ingram Micro’s exposure in cloud computing products
should also work in its favor. We believe that the cost benefits of
cloud computing are pushing different companies toward massive
information technology restructuring and upgrades. This is one of
the reasons that small and medium sized businesses have been
investing in the area despite the economic weakness that has led to
a slump in overall IT spending.
Apart from this, Ingram Micro has a strong track record of
beating the Zacks Consensus Estimate. The company posted an average
positive earnings surprise of 15.07% over the past four quarters.
The current quarter and the fiscal-year estimates stand at 80 cents
and $2.28 per share, representing respective year-over-year
increases of 9.0% and 16.85%. It is worth noting that the
fiscal-year earnings expectation is higher than the company’s
long-term earnings growth expectation of 13.35%.
These factors culminated to the Zacks Rank upgrade on Ingram
Micro’s shares. Apart from Ingram Micro, investors can also
consider stocks such as Cirrus Logic (CRUS),
Western Digital (WDC) and NCR
Corp (NCR). All these stocks sport the same Zacks Rank as
Ingram Micro.
CIRRUS LOGIC (CRUS): Free Stock Analysis Report
INGRAM MICRO (IM): Free Stock Analysis Report
NCR CORP-NEW (NCR): Free Stock Analysis Report
WESTERN DIGITAL (WDC): Free Stock Analysis Report
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