The Best And Worst Channel Stocks Of 2014 (So Far)

Channel Stock Gainers Outnumber Losers In The First Six Months Of 2014

Nearly all of the publicly traded solution providers and distributors tracked by CRN rode the Wall Street wave in 2013 to double-digit increases in their stock prices. So far this year the stock markets have continued their roll with the Dow Jones Index up more than 1.5 percent (as of the June 30 closing) and the Nasdaq up more than 5.5 percent.

But the stock price performances of solution providers and distributors have been more mixed. Of the 24 stocks followed by CRN, 14 have seen their stock price increase in the first half of 2014 while 10 have declined. Here's a look at who was up and who was down in the first six months of 2014, based on stock closing prices between Dec. 31, 2013 and June 30, 2014.

CDW

CEO: Thomas Richards

Dec. 31, 2013: $23.36

June 30, 2014: $31.88

Change: +36.5%

CDW, based in Vernon Hills, Ill., went public in mid-2013 and early investors have been well rewarded. In May the company (No. 8 on the CRN 2014 Solution Provider 500 list) reported that in its first quarter ended March 31 sales rose 10 percent to $2.65 billion while net income increased 80 percent to $50.9 million.

Insight Enterprises

CEO: Kenneth Lamneck

Dec. 31, 2013: $22.69

June 30, 2014: $30.74

Change: +35.5%

In May Insight Enterprises reported that sales in its first quarter ended March 31 were up 3 percent to $1.2 billion while the Tempe, Ariz.-based company's net earnings grew 27 percent to $11.6 million.

In March Insight, No. 14 on the CRN 2014 Solution Provider 500 list, was named the 2014 HP PartnerOne Growth Reseller of the Year for the HP Printing and Personal Systems Group.

Systemax

CEO: Richard Leeds

Dec. 31, 2013: $11.25

June 30, 2014: $14.37

Change: +27.7%

In April Systemax reported that sales in its first quarter ended March 31 declined 0.8 percent to $873.4 while the company's loss shrank to $3.0 million (from a $6.3 million loss in the same quarter one year earlier).

In June Port Washington, N.Y.-based Systemax (No. 19 on the CRN 2014 Solution Provider 500 list) acquired SCC Services B.V., a Netherlands-based distributor of business-to-business IT products.

Ingram Micro

CEO: Alain Monie

Dec. 31, 2013: $23.46

June 30, 2014: $29.21

Change: +24.5%

Distributor Ingram Micro reported a 1.2 percent increase in sales to $10.38 billion in its first quarter ended March 29. But net income declined 50.1 percent year over year to $24.8 million.

In June Ingram Micro, based in Santa Ana, Calif., unveiled a deal to acquire Rollouts, a Chaska, Minn.-based IT services company that provides field technicians to businesses and solution providers.

Tech Data

CEO: Robert Dutkowsky

Dec. 31, 2013: $51.60

June 30, 2014: $62.52

Change: +21.2%

For its first quarter ended April 30 distributor Tech Data reported sales of $6.7 billion, up more than 9 percent from the same period a year before. Net income, however, was down more than 24 percent to $13.5 million.

Tech Data, based in Clearwater, Fla., has been aggressively expanding into cloud services, offering turnkey cloud services through a partnership unveiled in June with dinCloud, a deal in May to deliver VMware's vCloud hybrid service, and a plan unveiled in April to offer cloud infrastructure solutions from Peak 10.

Ciber

CEO: David Peterschmidt

Dec. 31, 2013: $4.14

June 30, 2014: $4.94

Change: +19.3%

For its first quarter ended March 31 Ciber reported sales of $218.0 million, down almost 7 percent from the same period one year earlier. Net income for the Greenwood Village, Colo.-based solution provider, however, was up an impressive 143 percent to $3.9 million.

Ciber, No. 38 on the CRN 2014 Solution Provider 500 list, is a major channel partner with such IT vendors as Infor, SAP and Oracle.

Micros Systems

CEO: Peter Altabef

Dec. 31, 2013: $57.37

June 30, 2014: $67.90

Change: +18.4%

Last month Oracle struck a deal to acquire Columbia, Md.-based Micros Systems for $5.3 billion, focusing on the solution provider's hardware and point-of-sale applications for retail, hospitality and hotel industries.

In May Micros Systems (No. 29 on the CRN 2014 Solution Provider 500 list) reported revenue of $349.0 million for its third fiscal quarter ended March 31, up 10.7 percent from the same one year before, while net income for the quarter was up 13.6 percent to $50.3 million.

Computer Sciences Corp.

CEO: Mike Lawrie

Dec. 31, 2013: $55.88

June 30, 2014: $63.20

Change: +13.1%

Revenue in CSC's fourth fiscal quarter ended March 28 was $3.33 billion, down almost 5 percent from the same period one year before, the company said in May. Net income was $174 million, down 38 percent year over year. CSC is in the midst of a cost-cutting initiative and restructuring costs that reduced the company's bottom line.

For all of fiscal 2014 CSC, No. 4 on the CRN 2014 Solution Provider 500 list, reported revenue of just less than $13.0 billion, down more than 8 percent from fiscal 2013. The Falls Church, Va.-based company reported net income of $674 million for the year, down almost 3 percent from the prior year.

Arrow Electronics

CEO: Michael Long

Dec. 31, 2013: $54.25

June 30, 2014: $60.41

Change: +11.4%

In May distributor Arrow Electronics reported that sales in its first fiscal quarter ended March 29 reached $5.08 billion, up almost 5 percent year over year, while net income was up more than 37 percent to $107.1million.

Arrow's stock price may have got a boost from the Englewood, Colo.-based company's May announcement of a $200 million share repurchase program. In March the distributor became the first company to sign a distributor-managed reseller agreement with business analytics software leader SAS Institute.

Synnex

CEO: Kevin Murai

Dec. 31, 2013: $67.40

June 30, 2014: $72.85

Change: +8.1%

For the first six months (ended May 31) of Synnex's fiscal 2014, the distributor reported that revenue surged 28 percent to $6.48 billion. Net income for the Fremont, Calif.-based company rose more than 21 percent during the period to just short of $78 million.

CGI Group

CEO: Michael Roach

Dec. 31, 2013: $33.46

June 30, 2014: $35.48

Change: +6.0%

In April CGI reported that revenue for its second quarter ended March 30 grew 7 percent to $2.7 billion while net income more than doubled to $230.9 million.

That's quite a comeback for Montreal-based CGI (No. 9 on the CRN 2014 Solution Provider 500 list). CGI had a rough year in 2013 given its unfortunate role at the center of the Healthcare.gov website development controversy.

PCM

CEO: Frank Khulusi

Dec. 31, 2013: $10.27

June 30, 2014: $10.66

Change: +3.8%

For its first quarter ended March 31 PCM reported sales of $339.1 million, up about 0.6 percent from the first quarter last year. But the El Segundo, Calif.–based company's net income for the quarter jumped more than 133 percent to $2.9 million.

In April news leaked that Firoz Lalji, chairman of PCM rival Zones, had acquired a 5 percent stake in PCM. That set off speculation that Lalji might be preparing to launch a takeover bid. PCM is No. 27 on the CRN 2014 Solution Provider 500 list while Zones is No. 31.

ePlus Technology

CEO: Phillip Norton

Dec. 31, 2013: $56.84

June 30, 2014: $58.20

Change: +2.4%

For its fiscal year ended March 31, Herndon, Va.-based ePlus Technology reported that revenue reached $1.06 billion, up nearly 8 percent from the previous fiscal year. The company, No. 36 on the CRN 2014 Solution Provider 500 list, reported net income of $35.3 million, up a little more than 1 percent from fiscal 2013 earnings.

In June the company's board approved a plan to repurchase up to 500,000 shares of ePlus' outstanding shares.

Avnet

CEO: Rick Hamada

Dec. 31, 2013: $44.11

June 30, 2014: $44.31

Change: +0.5%

In April Phoenix-based distributor Avnet said its sales in the third quarter ended March 29 reached $6.68 billion, up 6.1 percent from the same period one year earlier. Net income was up 9.6 percent to $144.1 million after restructuring charges and other adjustments.

While the company reported strong growth in its Electronics Marketing business in the quarter, revenue from the distributor's Technology Solutions business was below expectations.

SS&C Technologies

CEO: William Stone

Dec. 31, 2013: $44.26

June 30, 2014: $44.22

Change: -0.1%

SS&C Technologies is the first company on our watch list to record a decline in its stock price for the first half of 2014. The company was No. 41 on the CRN 2014 Solution Provider 500 list.

In May the Windsor, Conn.-based solution provider reported that sales in its first quarter ended March 31 were $185.8 million, up more than 7 percent, while net income jumped more than 23 percent to just more than $26.4 million.

Accenture

CEO: Pierre Nanterme

Dec. 31, 2013: $82.22

June 30, 2014: $80.84

Change: -1.7%

Systems integrator Accenture (No. 3 on the CRN 2014 Solution Provider 500 list) reported that revenue for its third fiscal quarter ended May 31 was $8.24 billion, up almost 7 percent from the same period one year before. Net income was $881.8 million, up just less than 1 percent year over year.

In May Accenture named Stephen J. Rohleder to the newly created post of group chief executive for North America. He effectively took over for Jorge Benitez, chief executive, U.S., and senior managing director of North America, who said in early May that he was stepping down.

Cognizant

CEO: Francisco D'Souza

Dec. 31, 2013: $50.49

June 30, 2014: $48.91

Change: -3.1%

Cognizant executed a 2-for-1 stock split on March 10 and the Dec. 31 closing price here is calculated to reflect the change.

The Teaneck, N.J.-based company reported in May that revenue in its first fiscal quarter (ended March 31) was $2.42 billion, up nearly 20 percent from the same period one year earlier. Net income was $348.9 million, up almost 23 percent year over year. Cognizant was No. 10 on the CRN 2014 Solution Provider 500 list.

CACI International

CEO: Kenneth Asbury

Dec. 31, 2013: $73.22

June 30, 2014: $70.21

Change: -4.1%

In April CACI, which provides IT solutions to government agencies, reported that revenue in its third fiscal quarter ended March 31 was $900.4 million, down 0.6 percent from the same period one year earlier. Net income was $30.8 million, down 19.6 percent.

Last month the company forecast that sales for fiscal 2015, which started July 1, would be between $3.3 billion and $3.6 billion with net income falling between $125 million and $135 million. CACI is No. 16 on the CRN 2014 Solution Provider 500 list.

Syntel

CEO: Prashant Ranade

Dec. 31, 2013: $90.95

June 30, 2014: $85.96

Change: -5.5%

Syntel (No. 40 on the CRN 2014 Solution Provider 500 list) reported that for its first quarter ended March 31 the company's sales grew 16 percent to $219.5 million while the Troy, Mich.-based solution provider's net income increased more than 25 percent to $58.1 million.

ScanSource

CEO: Mike Baur

Dec. 31, 2013: $42.42

June 30, 2014: $38.08

Change: -10.3%

For its third fiscal quarter ended March 31, Greenville, S.C.-based ScanSource reported sales of $683.0 million, essentially flat with the same period a year earlier. The distributor's net income, however, rose more than 21 percent year over year to $16.9 million.

In May ScanSource Catalyst, one of the distributor's sales units, announced at the company's 1Comm Partner Conference a range of new investments and resources focused on Cisco's unified communications products.

PC Connection

CEO: Timothy McGrath

Dec. 31, 2013: $24.85

June 30, 2014: $20.69

Change: -16.7%

PC Connection, No. 24 on the CRN 2014 Solution Provider 500 list, reported that sales in its first quarter ended March 31 were $559.8 million, up nearly 11 percent from the same period last year. Net income was $7.1 million, up almost 17 percent year over year.

In February the Merrimack, N.H.-based company revealed a share repurchase program, spending up to $15 million.

Perficient

CEO: Jeffrey Davis

Dec. 31, 2013: $23.42

June 30, 2014: $19.47

Change: -16.9%

Fast-growing Perficient (No. 66 on the CRN 2014 Solution Provider 500 list) reported that first-quarter (ended March 31) sales grew more than 14 percent to $97.2 million. But the St. Louis-based solution provider's net income in the quarter was down more than 26 percent to $4.1 million.

Perficient has been growing both organically and through acquisitions: The company attributed the Q1 earnings decline, in part, to costs associated with its February acquisition of ForwardThink Group, a financial services consulting firm, for $46 million.

Black Box Network Services

CEO: Michael McAndrew

Dec. 31, 2013: $29.80

June 30, 2014: $23.44

Change: -21.3%

In May Black Box (No. 35 on the CRN 2014 Solution Provider 500 list) reported that sales for its fiscal year ended March 31 were down 2.6 percent to $971.7 million. And the Lawrence, Pa.-based company reported a loss for the year of $115.9 million compared to a profit of $28.8 million in fiscal 2013. The loss included a $154.4 million goodwill impairment loss.

Unisys

CEO: J. Edward Coleman

Dec. 31, 2013: $33.57

June 30, 2014: $24.74

Change: -26.3%

Blue Bell, Pa.-based Unisys (No. 17 on the CRN 2014 Solution Provider 500 list) was the biggest stock price loser on our list for the first half of 2014. The company reported a loss of $53.5 million for the quarter compared to a $33.9 million loss in the same period one year before.