Ingram Micro Inc. (IM), Avnet, Inc. (AVT): This Global IT Products Distributor Is Set to Take Off

All of these factors, in addition to razor thin margins as the norm, contribute to a low share price for Ingram Micro Inc. (NYSE:IM). However, although the North American market will not be of much help going forward, the company’s operations in Asia and Latin America provide a long runway for growth. In addition, Ingram Micro Inc. (NYSE:IM) is dabbling in cloud services, which could end up raising the company’s overall margins.

Valuation

Ingram Micro Inc. (NYSE:IM) currently trades at 0.83x book value despite having historically earned an 8.5% return on equity during “normal” years. Although it is possible that the company will earn a lower return on equity over the next year, the company’s long-term growth prospects in emerging markets and investments in its cloud services business suggest the company will do better in the future than it has in the past. Thus, investors who buy below 85% of book value could easily end up with an annualized return in excess of 10%

The article This Global IT Products Distributor Is Set to Take Off originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.