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Value

What recession? Insight Enterprises, Inc. (NSIT - Snapshot Report) recently raised full year guidance as favorable market conditions continued. This Zacks #1 Rank (strong buy) trades at just 8.6x forward estimates.

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

Insight Enterprises Beat the Zacks Consensus Again

On Aug 3, for the 10th time in a row, Insight Enterprises surprised on the Zacks Consensus Estimate. Second quarter earnings per share were 80 cents compared to the consensus of 62 cents.

That was a beat of 29%. The company has averaged a 22% surprise the last four quarters.

Double Digit Sales Gain

Sales rose 16% to $1.5 billion. Each of its segments saw sales growth.

In North America, which is the company's largest market, sales jumped 14% to $989.3 million from the same quarter a year ago. Net sales of hardware rose 17%, software climbed 9% and software services increased 23%.

EMEA sales rose 12% to $402.9 million but excluding the currency movements, net sales were flat year to year. Software services were the strongest, rising 27% even excluding currency movements.

APAC saw sales climb 82% to $76.8 million but excluding the effects of foreign currency movements, sales rose just 55%.

Insight Raised Full Year Guidance

The company continues to see favorable market conditions. After posting a stronger than expected first half of 2011, the company is ahead of plan.

Therefore, it raised guidance to the range of $1.90 to $1.98, well above its prior 2011 guidance of just $1.70 to $1.80 per share which it didn't raise in May even though it reported a very strong first quarter.

Zacks Consensus Estimate Rises

Given yet another earnings beat, it's not surprising that the Zacks Consensus Estimate for 2011 has risen since the earnings report.

1 estimate has moved higher in the last 30 days, which has pushed up the Zacks Consensus to $1.84 from $1.79 per share. This is, however, well below the company's guidance range.

Are the analysts just playing it safe given recession fears?

This is still solid earnings growth of 14.7% over 2010.

Strong Value Fundamentals

Shares of Insight Enterprises have been choppy and volatile for most of 2011.

But the company still has all the fundamentals that make up a value stock.

In addition to a P/E under 10, the company also has a price-to-book ratio of just 1.2. A P/B ratio under 3.0 usually indicates value.

Insight also has an extremely low price-to-sales ratio of just 0.1. A P/S under 1.0 usually indicates a company is undervalued.

Additionally, Insight also has an excellent 1-year return on equity (ROE) of 16%.

Insight isn't seeing a slowdown, yet, in demand for software and IT services. It still expects double digit earnings growth in 2011. Growth plus value is a powerful combination.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her at twitter.com/traceyryniec.

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