ScanSource Inc. - Value

ScanSource, Inc. (SCSC) reported a record fiscal first quarter as technology demand remained strong. It's another signal that the global economy is fast recovering from the Great Recession. The company has value fundamentals, with a price-to-book of just 1.7.

ScanSource distributes specialty technology products around the world in two segments: North America and International. The International segment includes Latin America, and Mexico, as well as Europe.

It distributes automatic identification and data capture (AIDC) and point-of-sale (POS) solutions through its ScanSources POS & Barcoding sales unit. Its Catalyst unit distributes voice, video and converged communications equipment.

Record Net Sales in the Fiscal First Quarter

On Oct 28, ScanSource reported is fiscal first quarter 2011 results and saw record net sales and net earnings.

Sales jumped 30% to $634.5 million from $488.4 million in the fiscal first quarter of 2010. The quarter was boosted by record sales in almost every market technology and geographic segment.

The company surprised on the Zacks Consensus Estimate by 11.5%. Earnings per share were 58 cents compared to the consensus of 52 cents. ScanSource made 41 cents in the year ago quarter.

Zacks Consensus Estimates Rise

ScanSource provided revenue guidance for the second quarter between $625 million and $645 million, which was similar to what it made in the record first quarter.

As a result, analysts are bullish about fiscal 2011. The Zacks Consensus Estimate has risen to $2.21 from $2.06 in the last 60 days.

This is earnings growth of 21.4%.

Analysts expect further double digit earnings growth in fiscal 2012 as EPS is expected to grow by 11.1% to $2.46 per share.

ScanSource is expected to report its second quarter results on Jan 27, 2011.

ScanSource Is a Value Stock

Including a low price-to-book ratio, ScanSource also has a value P/E of 14.9x forward estimates. This is on the high end of my value range, which is under 15.

It also has a value price-to-sales ratio of just 0.4, well under its peers at 0.7.

Shares of this Zacks #1 Rank (strong buy) have recently been hitting 2-year highs proving that some stocks can be hot and still have value.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service. You can follow her at twitter.com/traceyryniec.

 
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