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Here's Why You Should Add WESCO (WCC) to Your Portfolio

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Zacks Equity Research
·4 min read
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WESCO International Inc. WCC is currently one of the top-performing stocks in the technology sector. Markedly, an increase in share price and strong fundamentals signal its bullish run. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio right now.

The company has performed pretty well this year so far and has the potential to carry on the momentum in the near term as well.

Why an Attractive Pick?

Share Price Appreciation: A glimpse of the company’s price trend shows that the stock has had an impressive run on the bourses year to date. WESCO has rallied 29.2% compared with the industry’s 6.3% rally and S&P 500’srise of 17%.

Solid Rank & VGM Score: WESCO currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment.

Northward Estimate Revisions: Four estimates for the current year have moved north over the past 60 days against no southward revisions, reflecting analysts’ confidence in the company. Moreover, the Zacks Consensus Estimate for the current year has increased 2.7% over the same period. Also, the Zacks Consensus Estimate for 2021 has risen 12.7% to $6.22.

Positive Earnings Surprise History: WESCO has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in two out of the trailing four quarters, delivering an average earnings surprise of 30.07%.

Strong Prospects: The Zacks Consensus Estimate for 2021 earnings of $6.22 indicates year-over-year growth of 25.1%. The stock has a long-term expected earnings per share growth rate of 10%.

WESCO International, Inc. Price and Consensus

WESCO International, Inc. Price and Consensus
WESCO International, Inc. Price and Consensus

WESCO International, Inc. price-consensus-chart | WESCO International, Inc. Quote

Growth Drivers

WESCO is one of the largest players in the highly fragmented distribution market for electrical construction products in North America. It is riding on growing supply opportunities. The increasing adoption of supply chain solutions in cloud, data center, and broadband projects remains a tailwind.

The company's strong hold in the utility market is a major positive. Its solid momentum across investor owned utility, public power and generation customers is a tailwind. Further, an expanding construction market and increasing demand for renewable energy will continue to aid WESCO's performance in this market. We expect to see increased investment in upgrades and maintenance of existing infrastructure, as well as the construction of new, more contemporary and more automated power plants. Power utilities are also increasingly being driven by legislation, to adopt greener production policies. The company should benefit from changing legislation, growing consolidation in utility industry, improving demand for renewable energy and increasing operating costs in the energy sector.

Moreover, new customer wins and contract renewals are driving top-line growth. WESCO stays confident about product portfolio strength, value-added services and end-market momentum. Also, expanding OEM customer base remains a tailwind.

Further, the company remains focused on strategic investments and margin expansion initiatives. Solid growth in Canada and other international markets is driving WESCO’s organic growth.

Other Stocks to Consider

Some other top-ranked stocks in the broader technology sector include The Trade Desk Inc. TTD, carrying a Zacks Rank #1, and Dropbox, Inc. DBX and Inuvo, Inc. INUV, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for The Trade Desk, Dropbox, and Inuvo is currently projected at 25%, 40.9% and 30%, respectively.

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WESCO International, Inc. (WCC) : Free Stock Analysis Report
Inuvo, Inc (INUV) : Free Stock Analysis Report
The Trade Desk Inc. (TTD) : Free Stock Analysis Report
Dropbox, Inc. (DBX) : Free Stock Analysis Report
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