Back to top

Image: Bigstock

Arrow Electronics Rides on Broad Product Portfolio & Buyouts

Read MoreHide Full Article

On Aug 24, we issued an updated research report on New York-based Arrow Electronics Inc. (ARW - Free Report) .

The company is one of the world’s largest distributors of electronic components and enterprise computing products to industrial and commercial customers. The company is on a growth trajectory, gathering momentum from its positive earnings surprise history and strong fundamentals.

Notably, the company has beaten the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive surprise of 1.19%.

The company reported strong fiscal second-quarter 2017 results. The top- as well as the bottom line surpassed the respective Zacks Consensus Estimate and improved significantly year over year. Management also provided optimistic guidance for the third quarter.

The Zacks Consensus Estimate for Arrow moved upward following the solid quarterly results and impressive outlook, which reflects the optimistic view of analysts. In the past 30 days, earnings estimates for the third quarter increased 5.2% to $1.81. For 2017, the Zacks Consensus Estimate moved up 1.1% to $7.30 over the same time frame.

We believe that the impressive results and the guidance will help sustain the stock’s momentum. Notably, shares of Arrow have gained 14.7% in the last year, significantly outperforming the industry’s loss of 0.2%.

Fundamentals Driving Growth

Arrow’s core strength in providing best-in-class services and easy-to-acquire technologies are anticipated to positively impact its top line over the long-run. The company has secured significant market share through its broad portfolio of products and services, which include ArrowSphere, UC in the Cloud solutions, engineering design capabilities and remote infrastructure-management (Live Virtual Help Desk) services.

The company’s continuous efforts to maximize consumer satisfaction have resulted in original equipment manufacturers, contract manufacturers and commercial customers selecting Arrow’s distribution channels for marketing their products.

Additionally, Arrow’s persistent acquisitions enable it to enter markets, diversify and broaden its product portfolio and maintain its leading position, thereby significantly contributing to its revenue stream. Incremental sales from strategic acquisitions such as Computerlinks are anticipated to boost the top line.

Zacks Rank & Other Stocks to Consider

Arrow currently carries a Zacks Rank #2 (Buy).

Some other stocks worth considering in the broader technology sector include Applied Optoelectronics (AAOI - Free Report) , Lam Research (LRCX - Free Report) and IPG Photonics (IPGP - Free Report) , all sporting a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Applied Optoelectronics, Lam Research and IPG Photonics is projected to be 17.5%, 17.2% and 19.7%, respectively.

One Simple Trading Idea

Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.

This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.

Learn more >>

Published in