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Value

Growth is expected to continue in the global IT market in 2011. Insight Enterprises Inc. (NSIT - Snapshot Report) saw sales rise 16% in 2010 on a strong technology refresh cycle. This Zacks #2 Rank (buy) is cheap, with a P/E under 10.

Insight Enterprises provides IT hardware, software and services to small and medium-sized businesses and the public sector around the world.

Insight Beat By 16.3% in the Fourth Quarter

On Feb 14, Insight reported its fourth quarter results which surprised on the Zacks Consensus Estimate by 7 cents.

Earnings per share were 50 cents compared to the consensus of 43 cents. It kept alive the impressive earnings surprise streak, marking the 8th time in a row it has surprised.

Sales rose 14% in the fourth quarter to $1.3 billion.

North America, its largest market, continued to reflect the economic recovery. Sales were up 17% to $915.2 million from a year ago with hardware and software both seeing double digit gains while services fell by 10%.

Sales in the Asia/Pacific region (APAC) were also hot, rising 25% to $57.8 million.

For the year, net sales climbed 16% to $4.8 billion.

Outlook Is Still Bright for 2011

The company expects the global IT market to grow in the mid single digit range in 2011.

It expects to exceed this growth rate but expects higher sales growth in the first half of the year compared to the second half when software sales typically slow.

Earnings per share are expected to be between $1.70 and $1.80.

Zacks Consensus Estimates Rise

After yet another earnings surprise, its not surprising that the analysts have raised estimates. The Zacks Consensus Estimate climbed 9 cents to $1.76 per share in the last 2 months. This is earnings growth of about 10%.

The 2012 Zacks Consensus also rose to $1.89 from $1.75 per share in the last 60 days.

Insight Enterprises is expected to report first quarter results on May 4.

There's Plenty of Value

Insight Enterprises is trading with a forward P/E of just 9.9 which makes it much cheaper than the S&P 500 which is currently trading at 14.4x.

The company is also cheap if you look at the price-to-book ratio, which is only 1.5 and the price-to-sales ratio (P/S) of just 0.1. A P/S ratio under 1.0 usually indicates "value."

With its low P/E and solid growth, the company has a PEG ratio of 0.7, which also signals it is undervalued.

This Week's Value Zacks Rank Buy Stocks

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Want to own a bank but are still concerned about toxic assets and non-existent dividends? Look north of the border. Royal Bank of Canada (RY) recently reported record net income in the fiscal first quarter. This Zacks #1 Rank (strong buy) is trading at just 13.3x forward estimates. Read the full article.

The story isn't over for the discount retailers. Dollar General Corporation (DG) recently reported record fourth quarter results as consumers continue to look for value. This Zacks #1 Rank (strong buy) is expected to grow earnings in the double digits in 2011 and 2012. Read the full article.

With the baby boomers aging, post-acute and long-term care demand is growing. Kindred Healthcare, Inc. (KND) has been growing through acquisition. This Zacks #1 Rank (strong buy) is expected to grow earnings by the double digits in both 2011 and 2012. Read the full article.

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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