Avnet, Inc. (AVT: 27.91 0.00 0.00%) has been wheeling and dealing, announcing and closing on various acquisitions in the past few months.
Avnet distributes electronic components and computer products to customers in 70 countries worldwide.
On May 25, Avnet announced it was launching a tender offer bid for Unidux, Inc., a Japanese electronics components distributor. Unidux has 275 employees and in 2009 had revenue of $370 million.
The tender offer is expected to be completed by the end of July and is projected to be immediately accretive to earnings.
Avnet also recently confirmed that its deal to acquire Bell Microproducts Inc., which was announced on Mar 28, is expected to close in early July. Avnet is buying Bell for $7 a share.
To raise some cash for general corporate purposes, the company additionally announced on June 18 an offering of $300 million aggregate principal amount of 5.875% Notes due 2020 in a registered offering.
Avnet Beat by 18.8% in the Fiscal Third Quarter
Avnet easily blew by its own fiscal third quarter earnings guidance when it reported results on Apr 29. The company had projected earnings per share between 60 and 66 cents in the quarter. The Zacks Consensus called for 64 cents. Avnet ended up reporting 76 cents.
Sales jumped 28.5% to $4.8 billion from $3.7 billion in the year ago period. The company saw the pace of the recovery remaining strong in the quarter.
Outlook for the Fiscal Fourth Quarter
Avnet provided guidance for the fiscal fourth quarter between 76 cents and 84 cents per share. Currently, the Zacks Consensus is holding at 81 cents even though 1 estimate was revised downward in the last 30 days.
For the full year, the Zacks Consensus has fallen by a penny to $2.65 per share in the last month as one estimate, out of 12, was also lowered for the full year. Avnet made $1.92 per share in 2009.
Avnet is scheduled to report fiscal fourth quarter results on Aug 4.
Value Fundamentals
Avnet is trading at 10.6x forward earnings, which is well below the industry average of 19.7. It is also cheaper than when we last reviewed it in April. Back then, it was trading at 12.6x forward earnings.
It also has attractive price-to-book and price-to-sales ratios. It's price-to-book is just 1.4 and is under the industry average of 1.6. The company's price-to-sales ratio is a dirt cheap 0.2, whereas the industry average is 0.9.
Avnet is now a Zacks #2 Rank (buy) stock.
Read the Apr 6 article.
Update to Previous Value Zacks Rank Buy Stocks
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