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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

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

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