Avnet, Inc - Aggressive Growth

Avnet, Inc. (AVT) has everything going its way. Shares are skyrocketing, but drastic estimate revisions are keeping valuation enticing.

Also, this Zacks #1 Rank (Strong Buy) has a great earnings history and continues to grow both organically and through acquisition.

Company Description

Avnet distributes electronic components, computer and other tech products worldwide. The company cost-effectively connects suppliers with over 100,000 customers.

Sales Jump 42%

Avnet released first quarter results for fiscal 2011 that showed a 42% spike in sales, to nearly $6.2 billion. Adjusted net income more than doubled, to $143 million, from $67 million.

Earnings per shares came in at 93 cents, up from 44 cents a year ago and 12 cents ahead of the Zacks Consensus Estimate. Avnet has now topped expectations in each of the past 5 quarters.

The company expects next quarter's EPS to land between $0.99 and $1.07. At the time of the release the consensus was calling for 92 cents. Guiding above expectations is great to see.

New Acquisitions

During the quarter Avnet finished up 3 acquisitions that should ad about $4 billion to the top line annually. The targets were chosen to expand in "higher growth geographies and increasing our global scale and scope advantages."

Estimates Pop

After the earnings release, full-year projections for this year and next year jumped. All 21 annual estimates were revised upward. The Zacks Consensus Estimate for fiscal 2011 is up 40 cents, to $3.87.

Next year's projections are up 39 cents on average, to $4.11. These levels represent growth rates of 40% and 6%, respectively.

Valuations are Great

Thanks to those rising estimates, you can still scoop up shares at a discount. The forward P/E is in the single digits and the PEG ratio is only 0.8. Avnet's price to sales is inline with its peers at 0.22.

The Chart

With such low valuations, you probably wouldn't expect that shares have run up so much in the past 2 months. But with those rising estimates, there is still plenty of fuel for AVT to keep flying.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service
 
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