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Bull of the Day: SYNNEX (SNX)

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SYNNEX Corporation (SNX - Free Report) is a hidden cheap stock which also pays a dividend. This Zacks Rank #1 (Strong Buy) trades with a forward P/E of just 8.3.

SYNNEX is a global business process services company which provides distribution, logistics and integration of services fo rthe technology industry.

It has two segments Technology Solutions and Concentrix. Concentrix which operates as a wholly-owned subsidiary and offers strategic solutions and end-to-end business services.

Another Beat in Fiscal Q4 2018

On Jan 10, SYNNEX reported its fiscal Q4 results and blew away the Zacks Consensus Estimate by 40 cents. Earnings were $3.65 compared to the consensus of $3.25.

It was another earnings surprise in a long line of them as the company has only missed once in the last 5 years and that was all the way back in 2015.



Total revenue was up 5.8% to $5.6 billion from $5.3 billion a year ago. While it saw strong demand in Technology Solutions, revenue actually fell 2.7% year-over-year.

However, Concentrix revenue jumped 82% to $972 million as a result of the Convergys acquisition completed on Oct 5.

The company generated cash from operations of $141 million in the quarter.

It also raised its quarterly dividend by 7%. It's now yielding 1.6%.

Full Year Estimates Raised

Analysts liked what they heard as full year estimates are on the move higher.

The fiscal 2019 Zacks Consensus Estimate hs jumped to $11.81 from $11.58 in the last 2 months with 2 estimates moving higher since the earnings report. That's earnings growth of 8.5%.

Analysts also expect revenue growth in fiscal 2019 of 9%.

The fiscal 2020 Zacks Consensus Estimate also ticked higher, jumping to $12.64 from $12.46 in the last month. That's another 7% earnings growth.

SYNNEX Shares Up Big to Start 2019

Like a lot of stocks, SYNNEX was sold off to end 2018. It has rebounded 21% to start 2019.



But it's still cheap, with a forward P/E of just 8.3 and a price-to-sales ratio of only 0.2.

For investors looking for a cheap technology stock, which also pays a dividend, SYNNEX is one to keep on the short list.

Zacks' Top 10 Stocks for 2019

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