ScanSource Stock Upgraded (SCSC)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- ScanSource (Nasdaq: SCSC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • SCSC's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.31, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 79.97% to $85.99 million when compared to the same quarter last year. In addition, SCANSOURCE INC has also vastly surpassed the industry average cash flow growth rate of -44.74%.
  • SCSC, with its decline in revenue, slightly underperformed the industry average of 1.6%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for SCANSOURCE INC is currently extremely low, coming in at 10.40%. Regardless of SCSC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.04% trails the industry average.
.

ScanSource, Inc. operates as a wholesale distributor of specialty technology products. The company offers value-added distribution sales to resellers in the specialty technology markets. The company has a P/E ratio of 12.6, below the S&P 500 P/E ratio of 17.7. ScanSource has a market cap of $855.7 million and is part of the technology sector and computer software & services industry. Shares are down 3.4% year to date as of the close of trading on Thursday.

You can view the full ScanSource Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100% See his top picks for 14-days FREE.
null

If you liked this article you might like

Insider Trading Alert - VLGEA, SCSC And CYBX Traded By Insiders

Insider Trading Alert - WBC, SCSC And CNMD Traded By Insiders

Insider Trading Alert - CRM, SCSC And ENOC Traded By Insiders

Scansource (SCSC) Upgraded From Hold to Buy

Why ScanSource (SCSC) Stock Is Declining Today