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Value

Avnet Inc. (AVT - Analyst Report) is trading at just 7.5x forward estimates as the technology recovery rolls on.

Avnet distributes electronic components and computer products to customers in 70 countries worldwide.

It also provides services such as supply-chain and design-chain services, logistics solutions, product assembly, device programming, computer system configuration and integration and technical seminars to allow its customers to operate efficiently.

Avnet Beat the Zacks Consensus By 15% in the Fiscal Fourth Quarter

On Aug 11, Avnet reported its fiscal fourth quarter results which surprised on the Zacks Consensus by 12 cents. Earnings per share were 92 cents compared to the consensus of 80 cents.

Sales were up 18% for the fiscal year over fiscal 2009 as the company benefited from a "V" shaped recovery in the technology markets.

Revenue rose 46.9% to a record $3.12 billion in the Electronics Marketing division. Gross profit margin also improved year over year in all three regions.

The demand for electronic components remained strong in all three geographic regions.

The Technology Solutions division saw revenue climb 27% to $2 billion driven by servers, storage and networking products. The technology refresh cycle has been pushing results.

Guidance for the Fiscal First Quarter

Revenue in both segments are expected to be hotter than the fiscal fourth quarter with Electronics Marketing expected in the range of $3.35 billion to $3.65 billion and Technology Solutions between $2.25 billion and $2.55 billion.

Earnings per share are projected in the range of 76 to 84 cents per share.

Zacks Consensus Estimates Rise

Given the company's still bullish outlook as of August, the analysts have been raising full year estimates. The fiscal 2011 Zacks Consensus is up 23 cents to $3.48 per share in the prior 2 months.

This would be earnings growth of 25.5% over fiscal 2010.

The first quarter Zacks Consensus jumped to 81 cents in the last 60 days, on the higher end of the company's guidance range.

Value Credentials

Avnet doesn't just have a low P/E it also has a low price-to-book ratio of 1.3, well within the value parameters.

The company sports a solid return on equity of 14.3%, under its peers of 10.6%.

Avnet is a Zacks #1 Rank (strong buy) stock.

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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