Fast Growth in Consumer Technology Sales

Jay Peroni, Lead Analyst, CEO and FounderBlog (Members), Blog (Public), Growth

A Play on Direct to Consumer Computer Sales

Consumer tech trends have been creating much demand for consumer electronics and technology solutions.  One player has been able to tap into this fast growing area.  PCM, Inc. is what used to be know as PC Mall, Inc.  It offers direct to consumer Hardware & Software sales.  It sells everything from new to used open box items that are high-quality products from leading suppliers like Apple, Cisco, Dell, VMware,  and Microsoft at a significant discount.

Let’s take a look at a great opportunity in the consumer technology area…

Technology Solutions in One Place!

Company:               PCM Inc. (PCMI)

Industry:                Specialty Retail – Computer

Sector:                     Consumer Discretionary

Profile:   PCM, Inc. (PCMI) is a value added direct marketer of technology products, services and solutions to businesses, government and educational institutions and individual consumers. It offers its products, services and solutions through a dedicated sales force and field service teams and direct marketing channels. It also utilizes distinctive full-color catalogs under the PCM, MacMall, and PCMG brands and its websites pcm.com, macmall.com, pcmg.com, and other promotional materials.

 

Chart:



Reasons to Buy

  • Earnings have been growing rapidly +600% year-over-year to $0.36 per share, up from $0.05 per share in the same quarter a year ago.  Earlier this month, PCM had a banner earnings report!
  • Strong sales growth (20%) to $577.58 million in revenue.
  • Cheap on a PEG ratio basis (under 1) with strong free cash flow
  • Small nimble stock with explosive upside potential (target $45-$60) over next few years

5 Point Stock Inspection

  1. Earnings Trend: Grade A
  • Solid Earnings Growth Trend, solid Momentum, and a history of Surprises
  • Positive Analyst Earnings Revisions
  • Earnings growth expected to be 30%+ over next 3-5 years
  1. Financial Health: Grade A
  • Stronger financial profile than 98.73% of stock universe
  • Solid Sales Growth: Healthy 5-year growth
  • Free Cash Flow in top 30% of stock universe
  • Net profit margin greater than industry average
  1. Momentum: Grade A
  • Strong Momentum
  • Relative Strength is 97 out of 100
  • Stock up over 200% over past 12 months
  1. Risk: Grade A
  • Medium risk
  • Beta slightly below market (0.91)
  • Has lower risk profile than just 52.47% of stock universe
  1. Valuation: Grade A
  • Forward P/E at 16.41, is lower than industry average
  • Forward PEG Ratio (less than 1) at just 0.55
  • Good buy under $30/share

Overall:  Grade A

Bottom Line

PCM Inc. is a solid choice if you are looking to gain exposure in the consumer goods sector and want a small and nimble growth play.  The stock is a good buy under $30/share and should continue to see strong growth over the next few years.

 

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Disclaimer

While Dual Returns has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.