Ingram Micro: A Strong Buy - Analyst Blog

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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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CRUS , IM , NCR , WDC

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