+ Watch AVT
on My Watchlist
The Company, together with its consolidated subsidiaries is an industrial distributor of electronic components, enterprise network and computer products and embedded subsystems.
Avnet on Acquisition SpreeBy: Zacks Equity ResearchJuly 05, 2012Earlier this week, Avnet, Inc. (AVT - Analyst Report) completed yet another acquisition being that of Altron GmbH & Co. KG (Altron). This was done with the clear intent of proliferating Avnet’s Abacus unit across Europe’s IP&E market. Altron’s acquisition shall not only be immediately accretive to Avnet’s earnings but will also help it achieve its return on capital (ROC) target of 12.5%. Avnet appears to be on an acquisition spree as the Altron acquisition marks the second one this week post the acquisition of Magirus Group (Magirus). Both these German-based companies acquired by Avnet are going to be major growth drivers for the company’s yields across its European businesses. Altron is a German-based company which is an interconnect, passive and electrochemical components distributor with above 40 suppliers. Avnet shall be able to make a stronger foothold in the German economy, thereby expanding its market share substantially in the EMEA region through this venture. It is to be noted that the EMEA region has been a major point of concern for the company of late. This disconcerting feature became only too palpable in the third quarter results of fiscal 2012 which were declared on April 26, 2012. Sales across this area during the first nine months of fiscal 2012 dropped around 8.1% to reach $5.69 billion compared to the same period last year. This deteriorating demand in the European economy was the main reason for the 4.3% annual downfall reported in the company’s Electronics Marketing (EM) segment in its third fiscal quarter. We can expect these downsides to hopefully mitigate through such proactive advances made to ameliorate gains incipiently. Avnet should, nevertheless, be wary of its competitors in the industry. Big players to keep an eye out for in this regard include Anixter International Inc. (AXE - Snapshot Report), WESCO International Inc. (WCC - Analyst Report) and Richardson Electronics Ltd. (RELL - Snapshot Report). The company currently retains a Zacks #4 Rank, which translates into a short-term ‘Sell’ rating. We also maintain a long-term ‘Neutral’ recommendation on the stock.http://register.zacks.com/ucd/step1.php?ALERT=FOOL_ZER&d_alert=ZER_CONF&t=avt&ADID=FOOL_ZERFEED
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ratings and Key Statistics provided by Zacks.
SEC Filings and Insider Transactions provided by Edgar Online.
Powered and implemented by Interactive Data Managed Solutions. Terms & Conditions