U.S. Markets closed

Bear Of The Day: CDW Corp (CDW)

Brian Bolan

CDW Corp (CDW) is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day, but there is still a lot to like here.  Let's take a deeper look how this stock became the Bear of the Day and if you should gamble on this play with earnings coming in just a few days.

Description

CDW Corporation offers information technology products and services to business, government, education and healthcare customers primarily in the United States and Canada. Its hardware products comprise network communications, notebooks/mobile devices, data storage, video monitors, printers, desktops and servers as well as NetComm products. The company's software services include licensing, licensing management, software solutions and services. In addition, it offers configuration services which include virtualization, collaboration, security, mobility, data centre optimization and cloud computing. CDW Corporation is headquartered in Vernon Hills, Illinois.

Earnings History

This stock has a great earnings history.  The company has topped the Zacks Consensus Estimate in each of the last four quarters.  The average postiive earnings surprise is 8.9%.

This is clearly not the reason the stock is a Zacks Rank #5 (Strong Sell).

Estimate Revisions

The estimate picture is actually a very good one.  There are a few negative revisions, but on the whole, I like what I see.

The 2019 full year number slipped to $5.74 from $5.77 -- but then jumped right back to the prior level.  This negative revision, along with two negative revisions for the 2020 number are the only negatives that I see.

Valuation

I really like what I see here, with a 19x forward earnings multiple and solid top line growth of around 10%.  THe 17x price to book is rather high, but the 1x price sales tells me that the market values the sales of its services and products.

In summary, the slight negatives on the estimate revisions are things that investors need to be ok with if they want to be in this stock ahead of earnings.  The company is slated to report before the open on July 31.

Chart

CDW Corporation Price and Consensus

CDW Corporation Price and Consensus

CDW Corporation price-consensus-chart | CDW Corporation Quote

This Could Be the Fastest Way to Grow Wealth in 2019

Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.

These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.

Click here to see these breakthrough stocks now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CDW Corporation (CDW) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research