Fundamental analysis: PC Connection, Inc. (CNXN)

Awarener score: 7.0

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Excellent), the business stability (Good) and growth (Poor), and the company's inclination to return cash to the stockholders (Average).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.0

Business has been shrinking. It's been below average when measured against peer companies.
PC Connection, Inc. business trend stability is good. The higher the stability, the lower the risk. It looks well ranked against rivals.

Margins score: 4.7

CNXN profit margins -on goods and services sold- are usually extremely poor. They stand somewhat better than rival companies.
Business profit on sales tends to be hardly sufficient. It's almost average when measured against competitors.
Profits on sales made -available to repay debt and purchase properties- are usually meagre. They remain close to average when compared to peers.
Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still slightly worse than similar companies.
Profits -before income taxes- are usually sufficient considering total sales, and remain more than average in relation to rivals.
Total net profit tends to be sufficient when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 4.7

PC Connection, Inc. profit -on goods and services sold- has been growing at a very low pace. It's been close to average when compared to competitors.
In recent years, earnings -on operations- have been growing at a low step, which has been mediocre against comparable firms.
Profits -available to repay debt and purchase properties- have been growing at a very low pace, which compares weak when measured against peer enterprises.
Earnings -before income taxes and interests on loans taken- have been growing at a slow tempo. It turns to be in a weak position compared to similar stocks.
In past years, profits -before income taxes- grew at a low speed. It was mediocre against rivals.
In the previous years, growth on total net profit has been low, and below average when measured against peer companies.
Earnings per share have grown at a low rhythm in past years. It's been lacking compared to industry peers.

Miscellaneous score: 4.0

CNXN had to pay substantial income taxes in relation to profits made in the past years. It's been mediocre against peers.
The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 8.5

PC Connection, Inc. usually gets excellent returns on the resources it controls. It proves more than average in relation to peer firms.
The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain a slight improvement compared to similar companies.
There's usually abundant profitability -in relation to owned resources-. It ranks almost average when measured against competitors.
In the past, got very good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's great when measured against comparable enterprises.

Usage of Funds score: 6.9

CNXN usually uses a portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is rather normal. It stands great when measured against rival firms.
The company is usually somewhat investing in new property, plant, and equipment, to improve its operating capabilities, which is top tier when measured against industry peers.
In the past twelve months it paid low dividends, considering the current stock price. It came worse than most competitors.
Has significantly increased dividend payments in the past years. Business prospects probably have improved. The company has behaved in a weak position compared to similar firms.
Dividend payments usually represent a modest portion of genuine funds generation and should be reasonable safe. Sustainability looks slightly worse than comparable companies.
The company usually neither enlarges nor reduces the pool of investors, resulting in approximately the same mouths feeding on the pie of profits. It remains rather normal in relation to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in good shape compared to rivals.
The company uses a low portion of genuine fund generation to reward investors, which can most likely be sustained. It still looks similar to competitors.

Balance Sheet score: 6.6

PC Connection, Inc. intangible assets (like brands and goodwill) represent a small portion of resources controlled, according to accounting books. It isn't that a significant risk of liquidating them if the company ever gets in financial distress. It happens to be encouraging in relation to peer companies.
The company has more than enough short-term resources to face short-term obligations. Liquidity concerns are non-significant. It turns to be in good shape compared to similar firms.
All resources are company owned, with virtually no financial debt. Financial position is outstanding. The company could significantly borrow money if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains better than most rival firms.
A substantial portion of resources controlled are already cash or short-term investments, which is better for liquidity. It looks top tier when measured against rivals.
For every dollar of short-term obligations, the company has more than enough dollars in cash and short-term receivables. It's in good shape compared to peer firms.
For every dollar of short-term obligations, the company has roughly half of cash and equivalents, which is well ranked against similar enterprises.
Usually, sales are on somewhat less than three months credit. It still ranks below average when measured against peers.
Normally has approximately somewhat less than one month of sales worth in inventory. It comes up as in good shape compared to competitors.
On average, it takes higher than four months from the purchase to charging customers. It happens to be well ranked against peers.
On average pays suppliers after a month and a half from the purchase. It ranks weak when measured against industry peers.
The company pays its suppliers roughly two months before charging its customers, so there's some money invested in working capital. It's rather normal in relation to similar companies.
Net interest expenses consume a minor portion of usual business earnings, and are easily bearable. It stands better than most rival firms.
There is insufficient data to conclude on the relationship of EBITDA and debt for this company. It ranks unknown against comparable enterprises.
Revenues are huge in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements, allows the company to keep more money to reward stockholders in the long run. It looks a slight improvement compared to similar firms.
Resource exploitation is huge considering yearly sales, which is great. This metric is normally tied to the industry where the firm belongs. It's still better than most peer companies.

Valuation score: 7.7

PC Connection, Inc. looks cheap in relation to profits and financial position. It happens to be almost average when measured against competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains lacking compared to peers.
In the past twelve months, the company generated excellent free funds in relation to the stock price, which stands mediocre against similar companies.
The company usually generates much more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share might be very interesting. It's still similar to industry firms.
In the past twelve months, the company hasn't rewarded investors, considering both dividends and share on the pie of earnings. It came up close to average when compared to peer ventures.
The company has substantial more cash than debt. It might be poised to increase stockholder payments, or to fund new business projects. It looks well ranked against similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation might be more or less reasonable, but hardly cheap. It ranks below average when measured against peer companies.
Comparing the current stock price with the past twelve-months revenues gives a low relationship. One common cause includes profitability being poor. It looks close to average when compared to rival firms.
The relation between the stock price and accounting book value is somewhat high. It's important both to check this metric through time and to compare it with rival companies. The company remains mediocre against peer firms.
In the past twelve months, the operating business earned great money when compared to the current stock price and financial position. It happens to be almost average when measured against industry peers.
In an alternate metric of bang for the buck, the company has usually shown an excellent earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be undervalued. It's still a slight improvement compared to peer companies.

Total score: 6.0

Company at a glance: PC Connection, Inc. (CNXN)

Sector, industry: Technology, Electronics & Computer Distribution

Market Cap: 1.22 billions

Revenues TTM: 3.06 billions

PC Connection, Inc., together with its subsidiaries, provides various information technology (IT) solutions. The company operates through three segments: Business Solutions, Enterprise Solutions, and Public Sector Solutions. It offers IT products, including computer systems, data center solutions, software and peripheral equipment, networking communications, and other products and accessories, as well as provides services related to design, configuration, and implementation of IT solutions. The company markets its products and services through its websites comprising connection.com, connection.com/enterprise, connection.com/publicsector, and macconnection.com. It serves small to medium-sized businesses (SMBs) that include small office/home office customers; government and educational institutions; and medium-to-large corporate accounts through outbound telemarketing and field sales, and marketing programs targeted to specific customer populations, as well as through digital, web, and print media advertising. The company was founded in 1982 and is headquartered in Merrimack, New Hampshire.