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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 (Very good), the business stability (Very good) and growth (Lacking), and the company's inclination to return cash to the stockholders (Good).

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: 6.0

  • Business has been slightly shrinking. It's been weak when measured against peer companies.
  • PC Connection, Inc. business trend stability is very good. The higher the stability, the lower the risk. It looks somewhat worse than rivals.

Margins score: 5.0

  • CNXN profit margins -on goods and services sold- are usually very poor. They stand slightly worse than rival companies.
  • Business profit on sales tends to be sufficient. It's more than average in relation to competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually meagre. They remain rather normal in relation to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still somewhat better 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 low pace, which compares weak when measured against peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at a normal 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 very low, and weak when measured against peer companies.
  • Earnings per share have grown at a very low rhythm in past years. It's been in a weak position 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 slightly better than 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 great when measured against peer firms.
  • The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain in good shape compared to similar companies.
  • There's usually abundant profitability -in relation to owned resources-. It ranks encouraging in relation to 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: 7.0

  • CNXN usually uses a significant portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is abundant. 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 great when measured against industry peers.
  • In the past twelve months it paid run-of-the-mill dividends, considering the current stock price. It came somewhat worse than 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 somewhat 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 close to average when compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you 're interested in a technical explanation. It stands excellent in relation to rivals.
  • We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against 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 more than average in relation to peer companies.
  • The company has roughly triple short-term resources than short-term obligations. Liquidity concerns are most likely unimportant. It turns to be in good shape compared to similar firms.
  • Almost no resources controlled were provided for with financial debt. Financial strength is great. Company could significantly increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains somewhat better than rival firms.
  • Resources controlled can be quickly made into cash, which is very good for liquidity and risk. It looks more than average in relation to rivals.
  • For every dollar of short-term obligations, the company has more than enough dollars in cash and short-term receivables. It's a slight improvement compared to peer firms.
  • For every dollar of short-term obligations, the company has roughly half of cash and equivalents, which is slightly worse than 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 a slight improvement 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 substantially worse 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 lacking compared to similar companies.
  • To what extent normalized EBITDA covers interest expenses is not known. It stands impossible to compare against rival firms.
  • Business earnings have usually been great when measured against loans taken. Debt might be repaid almost as soon as desired. It ranks encouraging in relation to 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 close to average when 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 well ranked against peer companies.

Valuation score: 7.3

  • PC Connection, Inc. looks reasonable in relation to profits and financial position. It happens to be substantially worse 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 rather normal in relation to peers.
  • In the past twelve months, the company generated some good free funds in relation to the stock price, which stands worse than most similar companies.
  • The company usually generates more than enough 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 interesting. It's still below average when measured against industry firms.
  • In the past twelve months, the company has barely rewarded investors, considering both dividends and share on the pie of earnings. It came up rather normal in relation to peer ventures.
  • The company has more cash than debt. It might be poised to increase stockholder payments, or to fund new business projects. It looks somewhat better than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation might be more or less reasonable, but hardly cheap. It ranks substantially worse 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 slightly worse than peer firms.
  • In the past twelve months, the operating business earned good money when compared to the current stock price and financial position. It happens to be below average when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a very good earnings power ability when measured against the current stock price and financial position. It's still in good shape compared to peer companies.

Total score: 6.1


CNXN logos

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

Sector, industry: Technology, Electronics & Computer Distribution

Market Cap: 1.31 billions

Revenues TTM: 3.19 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.

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 (Very good), the business stability (Very good) and growth (Lacking), and the company's inclination to return cash to the stockholders (Good).