Our first idea today is a tech company that beat Wall Street’s estimates by $0.19 last quarter. Our second recommendation is a sale of an RV stock that is suffering from industry woes.
Buy: Insight Enterprises (NSIT)
From Upside
Insight Enterprises (NSIT) is a key player in the fast-growing—and highly competitive—technology solutions industry. Its solutions help integrate hardware, software, and services to help businesses run smarter.
Importantly, Insight has strong and growing market positions in cloud, mobility, and security solutions—three areas seeing robust growth. The company partners with many of the largest tech players, including Microsoft, Apple, and Samsung. The stock earns a 97 Overall score, paced by an 84 in Earnings Estimates. Insight also looks attractive compared to technology-solutions stocks in Quadrix by scoring above 90 for both sector-specific ranks.
Insight shares have rallied 46% so far this year. We see plenty more upside, reflecting strong growth and a reasonable valuation. Profit estimates have drifted higher in the past month, fueled by impressive June-quarter earnings. Per-share profits surged 27% and topped the consensus by 15%. The consensus calls for per-share profits to rise 40% this year, with a 9% increase in revenue. The estimated current-year P/E ratio is a modest 12, versus a median of 18 for all stocks in the Russell 2000 Index. Insight, capable of climbing 20% over the next 12 months, is being initiated as a Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, September 3, 2018