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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Synnex (SNX) ten years ago? It may not have been easy to hold on to SNX for all that time, but if you did, how much would your investment be worth today?
Synnex's Business In-Depth
With that in mind, let's take a look at Synnex's main business drivers.
Fremont, CA-based SYNNEX, founded in 1980, is a leading business process services company. The company, which is a part of Fortune 200, operates in numerous countries across North and South America, Europe and Asia-Pacific.
The company provides a comprehensive range of distribution, logistics and integration services for the technology industry and outsourced services focused on customer engagement to a broad range of enterprises.
SYNNEX reported revenues of $24.68 billion in fiscal 2020, increasing 3.9% year-on-year.
On Dec 1, 2020, SYNNEX completed the spin-off of its Concentrix business. Under this business unit, the company used to offer a portfolio of technology-enabled strategic solutions and end-to-end business services focused on customer engagement, process optimization, technology innovation, front and back-office automation and business transformation to clients in 10 identified industry verticals. Revenues from the Concentrix segment were $4.7 billion, representing 19% of the total revenue base in fiscal 2020.
Following the spin-off, SYNNEX is left with its Technology Solutions business unit. The business unit distributes peripherals, IT systems including data center server and storage solutions, system components, software, networking, communications, security equipment, consumer electronics or CE and complementary products.
Systems design and integration solutions are also part of Technology Solutions segment. Technology Solutions revenues were $20 billion. It generated 81% of revenues in fiscal 2020.
The company has significant operations in North and South America, Asia-Pacific and Europe. It recognized 28% of revenues from international operations.
At the end of fiscal 2020, SYNNEX had approximately 280,000 full-time employees; and 8,800 employees after the split (as of Dec 1, 2020).
SYNNEX faces competition in Technology Solutions segment from Arrow Electronics, Ingram Micro, ScanSource and Tech Data.
Its Concentrix business used to compete with players including, Accenture, Conduent, Genpact, Globant and SITEL Worldwide Corporation among others.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Synnex a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in April 2011 would be worth $3,867.71, or a 286.77% gain, as of April 19, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 217.16% and the price of gold increased 13.99% over the same time frame in comparison.
Analysts are forecasting more upside for SNX too.
SYNNEX's first-quarter fiscal 2021 results benefited from strong demand for its technology products and services. Moreover, steady recovery in the IT spending environment on the back of rapid digital transformation was a positive. Notably, acquisitions and partnerships are helping the company expand its product portfolio. The proposed merger with Tech Data is expected to be significantly accretive to SYNNEX’s top and bottom lines. Additionally, the split of the Technology Solutions and Concentrix businesses into two publicly-traded entities will add shareholder value and boost the company’s competitive position. Nonetheless, an increase in the allowance for doubtful accounts and staffing costs continue to weigh on its margins. Moreover, shares of SYNNEX have underperformed the industry in the past year.
Shares have gained 19.70% over the past four weeks and there have been 4 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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