This company, primarily wholesale distributers of technology solutions, has been grouped into whole sales -technology products/solution sector in information processing equipment industry.
It seems that the demand for wholesale of technology products and content from marketers, retailers, and re-seller customers of companies in this sector has been growing in the past two years thanks to continuingly strong demand, from for-profit business and personal consumers, for data process and computing &entertainment during the same period of time.
The typical gross margin is about 6%, and with a SG&A as percentage of sales of 4% the operating margin is about 1% in 2018. The typical enterprise price/EBI ratio is 15.
It seems that the demand for wholesale products distributed by this company has been growing in the past two years as indicated by increase in wholesale sales excluding effect of currency and acquisition. However, the growth in sales seems to be slow (low single digit) and mostly has been contributed from Europe market, which has been offset by the stronger US dollars.
The first three months of fiscal 2019 compared with the same period of 2018 (ended April 30 2018)
Organic revenue (excluding currency) increased about 13% attributable to increase of about 15% in US and increase of 26% in Europe. ** including one month acquisition effect.
Fiscal 2018 compared with fiscal 2017
Organic revenue (excluding currency) increased about 38% attributable to increase of about 53% in US and increase of 24% in Europe. ** including 11 month acquisition effect.
Fiscal 2017 compared with fiscal 2016
Organic revenue (excluding currency) increased about 1.5% attributable to increase of about 0.6% in US and increase of 2% in Europe.
Its gross margin went up slightly to about 6% in 2018 as a result of sale/product mix after acquisition. With slightly changed SG&A as percentage of sales (at 4%), we see a flat operating margin (at about 1% in 2018). Its average EBI/share increased since 2015.
Stock performance
This company is having an enterprise price/EBI ratio of 15. We think that its stock is being relatively undervalued compared with PCMI PCM, INC, which has 38 ratio.
