COMPANY DESCRIPTION

Avnet, Inc. (Avnet or “the company”) is one of the world’s largest distributors of electronic components,computer products and embedded technology. Avnet has established diversity across its operationsthrough varied offerings which provide a diversified revenue base and mitigate the risk of downturnpertaining to any single offering. However, intense competition in the market may erode the company'smarket share and profitability.

 

ECONOMIC MOAT

We believe Avnet’s moat is due to its expertise and broad offering that create intangible assets and a cost advantage over other smaller value-added distributors or large broadline distributors.  Avnet’s primary competitor is Arrow Electronics, and together the two firms have captured about 60% of the market.

 

OUTLOOK

Modest revenue growth, incrementally improved margins, and share repurchases should enable mid- to high-single digit bottom-line gains in the following year.

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STRENGTHS

  • Diversified portfolio of offerings

  • Diverse geographic presence

  • Strong supplier base

WEAKNESSES

  • Weak financial performance

THREATS

  • Compettive pressures

  • Technological changes

OPPORTUNITIES

  • Growth through acquisitions

  • Growth in the semiconductor industry

  • Increasing demand for cloud services

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  

 

The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.

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