The Zacks Analyst Blog Highlights: Ingram Micro, Brightpoint, Research In Motion, Nokia and MetroPCS Communications

Zacks

For Immediate Release

Chicago, IL – July 3, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Ingram Micro Inc. (IM), Brightpoint Inc. (:CELL), Research In Motion Ltd. (RIMM), Nokia Corp. (NOK) and MetroPCS Communications Inc. (PCS).

 

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

 

Ingram Micro Takes Over Brightpoint

 

Top information technology (IT) distributor Ingram Micro Inc. (IM) has signed an agreement to acquire Brightpoint Inc. (:CELL), a leading distributor of wireless devices, for a cash consideration of $840.0 million. The purchase price, including Brightpoint’s $190.0 million debt burden, equates to $9 per Brightpoint’s common share and reflects a 66% premium over last Friday’s price.

The Brightpoint Story

Brightpoint specializes in providing wireless communications technology globally. The company also provides customized logistics services to mobile network operators, mobile virtual network operators, resellers, retailers and wireless equipment manufacturers.

In April, the company reported a modest first quarter, with the bottom line missing the Zacks Consensus Estimate by 5 cents, and the top line comfortably beating the same. Looming macro uncertainties and a major customer loss in its high-margin Logistics business resulted in the earnings miss.

Brightpoint has tie-ups with heavyweights such as Research In Motion Ltd. (RIMM), HTC Corp and Nokia Corp. (NOK). It has also been winning deals from the likes of MetroPCS Communications Inc. (PCS).

The company has sales operations in 75 countries, accumulating 25,000 customers and generating $5.2 billion in revenue (up 46.0% year over year) and earnings per share of 71 cents (up 65.0%) in 2011.

A good deal for Ingram

Ingram’s intention was to broaden its distribution network and augment its high-margin Logistics business, to which Brightpoint’s offerings will fit in perfectly. The expansion of Ingram’s customer base in the mobility market is a bonus.

Ingram has been increasing focus on its Logistics business. To make the business more profitable, Ingram has resorted to the elimination of unprofitable lines of business, while concentrating on select contracts and the acquisition of new clients. The addition of Brightpoint will help boost Ingram’s Logistics revenue.

Brightpoint’s offerings will be complementary to Ingram’s portfolio, but customer overlap is negligible, which is a very big positive Moreover, lesser the integration time and cost would make the transaction accretive to Ingram’s earnings per share by the beginning of 2013.

Conclusion

The deal looks beneficial for Ingram, but Brightpoint’s major customer loss and weak guidance are concerns. Also, Brightpoint will add to Ingram’s existing level of debt.

Though we have a long-term Neutral recommendation on the stock, significant European exposure and debt burden lead to a Zacks Rank #4, implying a short-term Sell recommendation.

 

 

 

 

 

 

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

 

Read the analyst report on IM

Read the analyst report on CELL

Read the analyst report on RIMM

Read the analyst report on NOK

Read the analyst report on PCS

Zacks Investment Research



More From Zacks.com

Rates

View Comments (0)