The Best Channel Stocks – And The Worst – In 2021 (So Far)

Here is a look at the 10 channel company stocks that recorded the biggest gains in the first half of 2021 – and the six companies that saw stock price declines.

Channel Stocks Show Robust Growth As Economic Rebound Continues

The U.S. economy has been growing rapidly in 2021 despite concerns about inflation, labor imbalances and the continuing COVID-19 pandemic. Economists are generally forecasting that economic growth for all of 2021 will be in the range of 6.0 to 6.5 percent.

After stock prices took a big hit in early 2020 at the start of the pandemic, stocks generally were on the rise for the rest of the year – including many IT channel company stocks. Those increases continued into the first half of 2021 – and even accelerated for many companies.

Of the 25 channel company stocks on our watch list, 19 recorded gains in their stock price between Jan. 1 and June 30 – many by hefty double-digit percentages. Only six companies recorded declines in their stock price in the first half of 2021 and all but one of those by low single-digit amounts.

The Dow Jones closed at 34,502.51 on June 30, up 12.73 percent from its 30,606.48 close on Dec. 31, 2020. The tech-heavy Nasdaq closed at 14,503.95 on June 30, up 12.54 percent from its 12,888.28 close on Dec. 31, 2020.

Here‘s a look at the biggest stock price winners and losers in the first six months of 2021. We start with the 10 biggest winners, counting down to the IT channel company with the biggest stock price gain during the period. Then we list the six companies whose stock price declined the most, concluding with the IT vendor with the biggest loss. The rankings are based on stock closing prices on Dec. 31, 2020 and June 30, 2021.

Gainers No. 10: Unisys

CEO: Peter Altabef

Dec. 31, 2020, Close: $19.68

June 30, 2021, Close: $25.31

Change: +28.61 percent

June 30, 2021, Market Cap: $1.70 billion

In June Unisys, No. 29 on the CRN Solution Provider 500, acquired Unify Square, a developer of experience management technology for secure collaboration and communications platforms, for $152.5 million.

For its 2021 second quarter (ended June 30), Unisys reported revenue of $517.3 million, up 17.9 percent from $438.8 million in the same quarter one year earlier. The company reported a loss of $140.8 million for the quarter due to a $210.7 million settlement charge related to pension liability-reduction initiatives.

Gainers No. 9: Insight Enterprises

CEO: Ken Lamneck

Dec. 31, 2020, Close: $76.09

June 30, 2021, Close: $100.01

Change: +31.44 Percent

June 30, 2021, Market Cap: $3.53 billion

On May 6 Insight Enterprises, No. 14 on the CRN Solution Provider 500, disclosed that 12-year CEO Ken Lamneck will retire at the end of 2021. A search for a new CEO is continuing.

For its 2021 second quarter (ended June 30), Insight reported revenue of $2.23 billion, up 13 percent from $1.97 billion in the same quarter one year earlier. Earnings for the quarter were $58.6 million, up more than 26 percent from $46.4 million one year before.

Gainers No. 8: CDW

CEO: Christine Leahy

Dec. 31, 2020, Close: $131.79

June 30, 2021, Close: $174.65

Change: +32.52 Percent

June 30, 2021, Market Cap: $24.49 billio

Earlier this month CDW acquired cybersecurity services specialist Focal Point Data Risk in a move to enhance CDW’s security platform with more access management and cloud security services.

On Aug. 10 CDW, No. 5 on the CRN Solution Provider 500, announced the appointment of Al Miralles, currently with CNA Financial Corp., as senior vice president and CFO, effective Sept. 7. He will succeed Collin Kebo, who previously announced his intention to retire after 13 years at the company.

For its 2021 second quarter (ended June 30), CDW reported sales of $5.15 billion, up 17.9 percent from $4.37 billion in the same quarter one year before. Net income for the quarter was $274.1 million, up nearly 45 percent from $189.1 million one year ago.

Gainers No. 7: EPAM Systems

CEO: Arkadiy Dobkin

Dec. 31, 2020, Close: $358.35

June 30, 2021, Close: $510.96

Change: +42.59 Percent

June 30, 2021, Market Cap: $28.82 billion

On July 27 EPAM bought CORE SE, a professional services provider specializing in IT strategy and technology-driven transformations, in a move to help EPAM expand in the DACH (Germany, Austria and Switzerland) region. That followed the May acquisition of Just-BI, a Netherlands-based consultancy specializing in SAP S/4HANA, enterprise data and analytics program management.

For its 2021 second quarter (ended June 30), EPAM Systems, No. 23 on the CRN Solution Provider 500, reported revenue of $881.4 million, up 39.4 percent from $632.4 million in the same quarter one year before. Net income for the quarter was $114.7 million, up more than 72 percent from $66.6 million one year earlier.

Gainers No. 6: Synnex

CEO: Dennis Polk

Dec. 31, 2020, Close: $81.44

June 30, 2021, Close: $121.76

Change: +49.51 Percent

June 30, 2021, Market Cap: $6.32 billion

In March Tech Data and Synnex announced a $7.2 billion deal to merge and create the world’s largest IT distributor with annual sales of $57 billion, 150,000 customers and 22,000 employees. Synnex shareholders approved the merger in June and the deal is expected to be completed by the end of this year.

For its fiscal 2021 second quarter (ended May 31) Synnex reported revenue of $5.86 billion, up 31 percent from $4.47 billion in the same quarter one year before. Net income for the quarter was $93.1 million, up 63.5 percent from $57.0 million one year ago.

Gainers No. 5: DXC Technology

CEO: Mike Salvino

Dec. 31, 2020, Close: $25.72

June 30, 2021, Close: $38.94

Change: +51.40 Percent

June 30, 2021, Market Cap: $9.92 billion

In January French solution provider Atos disclosed that it had made a reported $10-billion bid to acquire DXC Technology. But Atos dropped the offer in February.

In April DXC, No. 4 on the CRN Solution Provider 500, completed the sale of its healthcare software provider business to Dedalus Group, a European healthcare and diagnostic software company.

For its fiscal 2022 first quarter (ended June 30, 2021) DXC reported revenue of $4.14 billion, down 8 percent from $4.50 billion in the same quarter one year before. The company reported net income of $278 million for the quarter compared to a $205 million loss one year ago.

Gainers No. 4: Conduent

CEO: Cliff Skelton

Dec. 31, 2020, Close: $4.80

June 30, 2021, Close: $7.50

Change: +56.25 Percent

June 30, 2021, Market Cap: $1.59 billion

For its 2021 second quarter (ended June 30) Conduent, a provider of business process services and solutions, reported revenue of $1.03 billion, up 1 percent from $1.02 billion in the same quarter one year before. The company, No. 20 on the CRN Solution Provider 500, reported net income of $12 million for the quarter compared to a $51 million loss one year ago.

Gainers No. 3: Computer Task Group

CEO: Filip Gyde

Dec. 31, 2020, Close: $6.12

June 30, 2021, Close: $9.67

Change: +58.01

June 30, 2021, Market Cap: $148.71 billion

For its 2021 second quarter (ended July 2) Computer Task Group reported revenue of $92.2 million, up 3.4 percent from $89.2 million in the same quarter one year earlier. Net income for the quarter was more than $1.83 million, up 4 percent from $1.76 million one year before.

CTG, a digital IT services and solutions provider, is No. 75 on the CRN Solution Provider 500.

Gainers No. 2: Perficient

CEO: Jeffrey Davis

Dec. 31, 2020, Close: $47.65

June 30, 2021, Close: $80.42

Change: +68.77 Percent

June 30, 2021, Market Cap: $2.66 billion

Digital consulting firm Perficient, No. 56 on the CRN Solution 500, has recorded robust growth in recent years as the company focuses on such core areas as digital transformation, cloud migration, ERP application implementations and data analytics.

For its 2021 second quarter (ended June 30) Perficient reported revenue of $184.1 million, up 26 percent from $146.3 million in the same quarter one year ago. Net income for the quarter was $16.6 million, up 151 percent from $6.6 million one year before.

Gainers No. 1: Consolidated Communications

CEO: Bob Udell

Dec. 31, 2020, Close: $4.89

June 30, 2021, Close: $8.79

Change: +79.75 Percent

June 30, 2021, Market Cap: $703.05 million

As a provider of broadband and business communications services to rural areas, Consolidated Communications, No. 35 on the CRN Solution Provider 500, could benefit from the $65 billion included in the $1 trillion infrastructure bill, now making its way through the U.S. Congress, for improving broadband internet access in rural areas.

For the second quarter of 2021 (ended June 30) Consolidated Communications reported revenue of $$320.4 million, down 1.5 percent from $325.2 million in the same quarter one year ago. The company reported a $55.4 million net loss for the quarter compared to net income of $13.8 million one year before.

Decliners No. 6: SS&C Technologies

CEO: William Stone

Dec. 31, 2020, Close: $72.75

June 30, 2021, Close: $72.06

Change: -0.95 Percent

June 30, 2021, Market Cap: $18.44 billion

In April SS&C struck a deal to acquire Mainstream Group, a provider of investment administration, fund accounting and other services. But the company withdrew from the deal in June in light of a competing higher offer for Mainstream.

On June 28 SS&C announced a number of organizational changes “to capitalize on growth opportunities in financial services.” The changes included restructuring the management of financial services products SS&C acquired when it bought DST Systems in April 2018.

On July 28, after the period covered by this stock price analysis, SS&C announced a $1 billion common stock repurchase program.

Decliners No. 5: ePlus Technology

CEO: Mark Marron

Dec. 31, 2020, Close: $87.95

June 30, 2021, Close: $86.69

Change: -1.43 Percent

June 30, 2021, Market Cap: $1.17 billion

In January ePlus Technology, No. 36 on the CRN Solution Provider 500, acquired competitor and fellow solution provider Systems Management and Planning in a move to expand ePlus’ digital transformation services portfolio.

In March ePlus announced that its board of directors had authorized the company to repurchase of up to 500,000 shares of outstanding stock through May 2022.

For the fiscal 2022 first quarter (ended June 30) ePlus reported sales of $416.6 million, up more than 17 percent from $355.0 million in the second quarter of 2020. Net earnings for the quarter were $23.5 million, up more than 35 percent from $17.4 million one year earlier.

Decliners No. 4: Connection

CEO: Timothy McGrath

Dec. 31, 2020, Close: $47.29

June 30, 2021, Close: $46.27

Change: -2.16 Percent

June 30, 2021, Market Cap: $1.21 billion

For its 2021 second quarter (ended June 30) Connection, No. 26 on the CRN Solution Provider 500, reported sales of $704.2 million, up 28 percent from $550.0 million in the second quarter of 2020. Net income for the quarter was $17.3 million, up 126 percent from $7.6 million one year before.

Decliners No. 3: CyrusOne

Interim CEO: David Ferdman

Dec. 31, 2020, Close: $73.15

June 30, 2021, Close: $71.52

Change: -2.23 Percent

June 30, 2021, Market Cap: $8.76 billion

CyrusOne President and CEO Bruce Duncan abruptly departed the company in July after serving in the post for a little more than one year. On July 28 the company, a leading data center service provider, said company co-founder and former CEO David Ferdman was named interim president and CEO.

On the same day as that announcement CyrusOne, No. 43 on the CRN Solution Provider 500, reported that revenue for the company’s 2021 second quarter (ended June 30) was $284.6 million, up 11 percent from $256.4 million in the second quarter of 2020. Net income, however, dropped 84 percent in the quarter to $7.4 million compared to $45.0 million one year before.

Decliners No. 2: ManTech International

CEO: Kevin Phillips

Dec. 31, 2020, Close: $88.94

June 30, 2021, Close: $86.54

Change: -2.70 Percent

June 30, 2021, Market Cap: $3.51 billion

For its 2021 second quarter (ended June 30) ManTech reported revenue of $648.6 million, up 2.5 percent from $632.5 million in the second quarter of 2020. Net income for the quarter was $36.6 million, up more than 22 percent from $29.9 million one year earlier.

Decliners No. 1: Cognizant

CEO: Brian Humphries

Dec. 31, 2020, Close: $81.95

June 30, 2021, Close: $69.26

Change: -15.49 Percent

June 30, 2021, Market Cap: $36.53 billion

For its 2021 second quarter (ended June 30) Cognizant reported revenue of $4.59 billion, up nearly 15 percent from $4.00 billion in the second quarter of 2020. Net income for the quarter was $512 million, up nearly 42 percent from $361 million one year earlier.

The company, No. 6 on the CRN Solution Provider 500, now expects to report 9 to 10 percent growth for all of 2021.

But a major point of concern is Cognizant’s high employee attrition rate, which reached 29 percent on an annualized basis in the second quarter – up from the 21 percent annualized attrition rate in the first quarter. (While Cognizant is based in the U.S., about two-thirds of the company’s employees are in India where attrition is highest.)

That could make it difficult for the company to maintain growth – CEO Brian Humphries has told financial analysts that the company has had to let go of new business because of its struggles to hire and retain talent. The company plans to hire 100,000 new employees this year.

In August Cognizant announced the acquisition of digital engineering assets from Hunter Technical Resources, an Atlanta-based digital engineering and project management agency. That marked Cognizant’s sixth acquisition in 2021.