The Best (And Worst) Channel Stocks of 2012
Happy New Year?
Many channel companies might be happy to start a new year after their performance on Wall Street in 2012. Of 12 companies tracked by CRN, six saw their share prices decline from the end of 2011 to the end of 2012. Meanwhile, the Dow Jones index increased 7.3 percent and Nasdaq increased 15.9 percent during that period. Only four of the 12 saw their stock price increase by more than 10 percent. Here's a closer look at the 12 companies, from worst to first.
Sapient
CEO: Alan Herrick
Dec. 31, 2012: $10.56
Dec. 31, 2011: $12.60
Change: -16.2%
Sapient was also the worst-performing channel company at the midpoint of 2012, but improved slightly during the second half of the year, gaining 49 cents. Still, shares were down more than $2 for 2012.
ScanSource
CEO: Mike Baur
Dec. 31, 2012: $31.77
Dec. 31, 2011: $36.00
Change: -11.8%
ScanSource lost almost $7 per share in the second quarter before gaining some back in the second half of the year. Last November, the distributor launched ScanSource Services Group, a new business unit that focuses on support programs and services for solution providers.
Tech Data
CEO: Bob Dutkowsky
Dec. 31, 2012: $45.53
Dec. 31, 2011: $49.41
Change: -7.9%
Tech Data CEO Bob Dutkowsky admitted the company lost some market share while dealing with an SAP implementation in the U.S., but pledged to regain the business without getting into a price war with competitors.
Ingram Micro
CEO: Alain Monie
Dec. 31, 2012: $16.92
Dec. 31, 2011: $18.19
Change: -7.0%
Ingram Micro begins 2013 with a new North American president. Paul Bay takes that title this month, a bump up from the acting president role, he's had since last November when it was announced he was replacing Keith Bradley.
Avnet
CEO: Rick Hamada
Dec. 31, 2012: $30.61
Dec. 31, 2011: $31.09
Change: -1.5%
Avnet shares closed north of $36 in April, but remained closed to the $30 mark for much of the year. As part of its movement toward more services, the distributor's Technology Solutions group announced plans last November to launch off-premise cloud solutions from Amazon Web Services.
PCM
CEO: Frank Khulusi
Dec. 31, 2012: $6.21
Dec. 31, 2011: $6.28
Change: -1.1%
PCM begins 2013 with a new name (formerly PC Mall) and a new ticker symbol (PCMI instead of MALL). The El Segundo, Calif.-based company now combines all its primary commercial subsidiaries PC Mall Sales, Sarcom and PC Mall Services, into a single subsidiary tha twill operate under the unified commercial brand PCM. Meanwhile, PC Mall Gov will change its name to PCMG and operate under the brand PCM-G.
"After careful examination of the trends taking shape in the markets we serve, we have determined that going forward, our commercial customers can benefit from a more unified and streamlined brand strategy," CEO Frank Khulusi said in a statement announcing the change.
Arrow Electronics
CEO: Mike Long
Dec. 31, 2012: $37.41
Dec. 31, 2011: $38.08
Change: 1.8%
Like many public companies in 2012, Arrow posted strong gains in the first quarter, closing at $42.61 in late April before losing more than $5 per share the next week. Shares closed as low as $31.75 in early July before regaining some momentum during the second half of the year.
During its third fiscal quarter, Arrow's earnings fell 19 percent while sales also fell to $4.96 billion from $5.19 billion. On a bright note, its Enterprise Computing Solutions saw organic year-over-year sales growth for the 11th consecutive quarter, said CEO Mike Long.
PC Connection
CEO: Tim McGrath
Dec. 31, 2012: $11.50
Dec. 31, 2011: $11.09
Change: 3.7%
During 2012, PC Connection shares bottomed out at $7.35 in early April before rebounding. Shares have traded above $10 since last October and finished up 3.7 percent for the year.
In August, PC Connection achieved Cisco Systems' Cloud Builder designation from the networking giant for meeting the required competencies across all cloud infrastructure components (security, networking, compute, storage and virtualization solutions), cloud management applications, and a formal cloud professional services practice, according to PC Connection.
Synnex
CEO: Kevin Murai
Dec. 31, 2012: $34.38
Dec. 31, 2011: $30.46
Change: 12.9%
Synnex becomes the first company to post double-digit percentage growth in its stock price for 2012. While Synnex shares closed at $42.77 in mid-March, the company's 12.9 percent uptick for the year is still solid for investors.
Last November, Synnex expanded its One IT program to include human resources and recycling solutions and has plans for even bigger expansion in 2013, executives told solution providers at the distributor's Varnex Fall Conference in Las Vegas.
Insight Enterprises
CEO: Ken Lamneck
Dec. 31, 2012: $17.37
Dec. 31, 2011: $15.29
Change: 13.6%
Insight shares closed as low as $15.01 as recently as Nov. 16, but rebounded strongly over the last month and a half. In late November, the Tempe, Ariz.-based solution provider said it has exceeded three million seats for its subscribed public cloud offerings through InsightCloud.
Accenture
CEO: Pierre Nanterme
Dec. 31, 2012: $66.50
Dec. 31, 2011: $53.23
Change: 24.9%
Accenture's strong performance in 2012 may lead to another financial windfall for CEO Pierre Nanterme, who earned almost $10 million in total compensation for 2011. Accenture shares jumped nearly $5 on Sept. 28 and closed above $70 as recently as Dec. 19.
Computer Sciences Corp.
CEO: Mike Lawrie
Dec. 31, 2012: $40.05
Dec. 31, 2011: $23.36
Change: 71.4%
CSC earns the title of top-performing channel company for 2012, after doing the same for the third quarter. On Nov. 6, shares jumped more than $5 per share and the company's stocked gained another $3.44 the rest of the quarter too. It reached a 2012-high of $40.58 on Dec. 17. In December, CSC agreed to sell its credit services business unit to Equifax for $1 billion in cash.