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ScanSource Inc. (SCSC - Snapshot Report) blew by the Zacks Consensus Estimate when it reported fiscal second quarter results on Jan 27 in yet another example that the global recovery is on the fast track. This Zacks #1 Rank (strong buy) is trading at just 14.3x forward estimates.

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.

ScanSource Had a Record Second Quarter

On Jan 27, ScanSource reported its second quarter results and easily beat the Zacks Consensus by 38%. Earnings per share were 80 cents compared to the consensus of 58 cents. It made just 44 cents a year ago.

Sales rose 25% to $684 million from $548 million in the fiscal second quarter of 2010. Strong worldwide growth in the communications businesses and its International Bar Code and POS business boosted the quarter.

End market demand also improved.

Zacks Consensus Estimates Rise

ScanSource gave revenue guidance for the fiscal third quarter in the range of $630 million to $650 million.

Given the big earnings beat and the guidance range, analysts are bullish about the rest of fiscal 2010 and also 2012.

The fiscal 2011 Zacks Consensus has risen by 27 cents to $2.52 per share in the last 30 days. This is earnings growth of 38% compared to the $1.82 the company made last year.

2012 is also moving higher with the Zacks Consensus going to $2.71 from $2.54 in the last month. That is further earnings growth of 8%.

Still Has Value

In addition to the attractive P/E ratio, ScanSource has other value characteristics.

Its price-to-book ratio is 1.8, which is well under the value parameters of 3.0.

The company also has a solid return on equity (ROE) of 12.6%.

Shares have been pressuring recent highs.

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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