Computacenter Share Discussion Threads

[boadicea] 18/3/2022 08:07

Given the excellent resuls and track record this should be well into the thirties and could be pushing on to 40 quid when markets recover their poise.

[km18] 16/3/2022 15:37

Computacenter plc is an emerging and independent technology partner corporation which enables customers to source, transform and manage their technology infrastructure, to deliver digital transformation, enabling people and their businesses. As a result, the firm supports its customers to meet their technological needs while arranging commercial structures and supply chain services. Consequently, it implies that Computacenter is a provider of structured solutions and resources to assist clients with deploying digital technology to achieve corporate objectives. Considering the firm’s vision and mission, its IT solutions involve security, data center, workplace, network, user productivity and service desk. Given the wide product portfolio, the firm derived multiple sources of income which in turn forced up operating profit from £198.5m to £255.1m in 2021. The sudden profit hike was incorporated into the firm’s EV/EBITDA of 9.42, hence capturing intrinsic value. Subsequently, Computacenter optimised its equity from £630.9m to £744.8m in 2021, which in turn led to a return on equity of 29.2%. Furthermore, operating, investing, and financing activities were effectively funded, illustrated by the P/FCF of 20.3. Given that tech stocks are currently trading at a P/E of 30x, Computacenter is undervalued since the firm’s P/E ratio stands at 16.8, signifying that the security is expected to surge in value, illustrated by the P/B ratio of 4.7.



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[sunshine today] 16/3/2022 12:21

I totally agree the bigger the company the more difficult to obtain super fast growth.


Obviously the trick is to sell a stock when you did after it’s been re rated to the sector average or above.

The PE looks low here after todays results

[boadicea] 16/3/2022 10:27

sunshine - It's not easy to grow a large company as fast as a small one!
TRD will be fine until it isn't. I held DOTD for a time until it looked overpriced so I sold most of them (thankfully). One slight slip and the roof falls in.

[sunshine today] 16/3/2022 09:30

I accept the PE is low so 30% upside from here short term.

But it’s not in the growth league of TRD a tiny premium listed share that’s growing at 100%.

Good luck.

[boadicea] 16/3/2022 09:11

An amazing lack of comment on stonking results which illustrate the undervalued nature of this slightly boring (?) company. I am happy to be bored!

Revenue +23.6%
Adjusted eps +31%

The results would have been even better if the pound had its current value vs the dollar, now ~2.6% down. The effect on profit is complex but the 2.6% would largely be on margin but also dependent on the currency of supply.

The effects of supply issues were covered in the following points which I quote -

"While supply chain shortages were an issue, these gave us an opportunity to outperform our competition through the performance of our well-developed supply chain. Many of our larger customers are highly reliant on deploying new technology and they have taken to ordering much further in advance. While this gives us greater visibility, it has also meant an increase in the inventory we are carrying. We do expect our inventory to return to more normal levels as supply chain constraints ease.

"Throughout the year, product shortages have materially impacted the supply of key equipment for our customers, with some orders being materially delayed or only partly fulfilled. Whilst product availability increased during December, the unexpected impact on working capital through the year was significant. Inventory levels have increased across the business, as a result of carrying stock for orders that we cannot deliver without a critical part or, increasingly through the year and particularly in North America where customers have ordered early and subsequently delayed delivery, as data center facilities are not ready. We do not expect inventory to return to normal levels until there is a longer-term supply improvement.

"The Group had GBP341.3 million of inventory as at 31 December 2021, an increase of 61.5 per cent on the balance sheet as at 31 December 2020 of GBP211.3 million. Over three quarters of this increase was attributable to our North American Segment, which had closing inventory of GBP212.5 million (2020: GBP103.2 million).
While supply has been restricted, demand has continued to rise, with our product order backlogs across all geographies at all-time highs and considerably larger than at the end of 2020. This gives us a high degree of confidence that the Technology Sourcing business will be well placed to benefit in the year ahead.
We remain alert to ongoing product shortages, and further strengthening of the pound would create a stronger FX translation headwind."
[End quote]

I await revised broker comments and targets with interest.

[boadicea] 15/3/2022 19:50

Good results were comprehensively flagged in the last update (24th Jan) so should be in the price. What is not yet in the price is the verdict on the past 10 weeks and the forward outlook with specific comment on supply line difficulties and recent pricing power vs. cost escalation. Logically, those are the factors which should determine the market response tomorrow (but logic gives way to gut reaction in current turbulent markets.)

We know that the company has increased stock provision to mitigate against potential shortages so I look forward to hearing how successful that has been.

[bigbertie] 15/3/2022 11:54

Sudden upward burst!!
It's results tomorrow I think.

[aewail] 05/3/2022 08:44

I have been following this company for a number of years. Especially as it had some big customers e.g.bp. I wish I had bought in sooner. Currently 'CCC' has 587 open vacancies. Wow! This is such a World Wide growing company. In conjunction with its later financial results. Happy that I have now invested. On wards and upwards.

[mazeltov] 04/2/2022 09:48

Very undervalued company performing well with low costs and high volumes achievable

[boadicea] 25/1/2022 16:20

//bathcoup - "[having] a higher level of inventory" is not seen as something positive// ... but being in a position to supply from stock when a product elsewhere is on an uncertain extended delivery most certainly is a positive.
It's good for reputation and may command a price premium. With money in the bank earning a negative (inflation adjusted) return, it's a no-brainer for companies with sensibly predictable demand and a positive cash balance. The effective reputational and actual cost of delayed contracts due to a shortage of critical components can far outweigh the temporary cost of some extra stock. I trust the management to have worked this out!

[imastu pidgitaswell] 24/1/2022 15:52

Well it depends - high tech and prone to being overtaken technology, no.

Stuff that your clients need and without which your jobs would be delayed and reduce profitability - yes.

It's just exchanging cash for essential supplies. Quite sensible - provided you use them.

[bathcoup] 24/1/2022 15:19

"[having] a higher level of inventory" is not seen as something positive.

[imastu pidgitaswell] 24/1/2022 13:08

I would agree - and note one of the benefits of having a strong balance sheet, being they can manage inventories to suit the business.

[boadicea] 24/1/2022 12:56

On a more normal day this encouraging update should have boosted the share price As it is, in the midst of an avalanche of selling elsewhere, we shall probably be lucky to finish in the blue. That said, CCC is looking distinctly good value compared to some of its higher flying competitors and imo, any weakness could be a gift to longer term investors.

[hawaly] 19/1/2022 10:04

Trading Update Monday

GLA 😎

[woodyjmw] 11/1/2022 13:38

Another Broker recommendation:
JEFFERIES INITIATES COMPUTACENTER WITH 'BUY' - TARGET 4,100 PENCE

[woodyjmw] 22/12/2021 10:44

Reported today:
STIFEL RAISES COMPUTACENTER PRICE TARGET TO 3,219 (3,189) PENCE - 'BUY'

[woodyjmw] 18/12/2021 22:52

Chart and prospects looking positive for ccc, should continue with the IT support required for working from home. One of the better tech performers at the moment.

[mammyoko] 29/10/2021 07:25

Beat would have been bigger if not for supply constraints. Order books correspondingly healthy. Bodes well for continued momentum into next financial year.

[hawaly] 28/10/2021 15:26

Trading Update tomorrow ......

GLA

😎

[shammytime] 15/10/2021 16:07

Have CC suffered a cyber attack today?

[imastu pidgitaswell] 09/9/2021 16:09

Ah. Carry on...

(Bet they weren't best pleased with Carillion going under...)

😳

[boadicea] 09/9/2021 14:59

Cerillion (CER), NOT Carillion!
They both appear in the same sector comparisons, as does NCC, again on a much higher P/R rating but not excessive.
In other respects I tend to agree.

[imastu pidgitaswell] 09/9/2021 12:29

How can you compare CCC with Carillion?!

It has always had a low valuation - for reasons we can only speculate on. I remember back when it was 300-400 pondering it (and it's on this thread - in 2012-13 or so). My view at the time was that the City just wan't interested as it was well funded (never had net debt), its activities were organic, and there no fees to be had - always the cynic...