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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Pc Connection, Inc. (XNAS:CNXN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CNXN
Name:
PC CONNECTION, INC. (XNAS:CNXN)
Sector:
- 40736.00K
Industry:
Electronics & Computer Distribution
CEO:
Mr. Timothy McGrath
Total Employees:
2,542
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -741.80% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PC CONNECTION, INC.(CNXN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ELECTRONICS & COMPUTER DISTRIBUTION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
47.95
One Month Price Target:
$48.12
Six Month Price Target :
$48.95
Likely Price in One Year's Time:
Ticker:
$49.94
Likely Trading Range Today Under (Normal Volatility)
$47.75
Price Upper limit ($) :
$48.18
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$45.38
This week:
$42.2
This month :
$36.46
Other Primary facts
Market Cap:
1.25B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
26.27M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.88%
-25.13%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$59.88
$54.42
$36.02
$41.48
Medium risk (<10%) entry points
Buy Call
Sell Call
$52.65
Buy Put:
Sell Put:
$51.48
$43.24
$44.42
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CNXN
Sharpe Ratio:
0.84%
Comparison:
CNXN, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -22.38% lower than the industry
& is -62.98% lower than the market/S&P 500 average
Average Returns/Yield of
CNXN
Daily returns:
0.03%
Weekly returns:
0.15%
Monthly returns:
0.62%
Yearly returns:
8.65%
Comparison of returns:
Average annual returns/yield (last 3 years) is -14.01% below industry average
Classification:
CNXN, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.65
Statistical test of Returns:
CNXN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.62%
Weekly Volatility:
5.87%
Monthly Volatility:
11.74%
Yearly Volatility:
40.66%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.60%
Volatility in last five trading days has been -39.11% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.36%
Weekly VaR:
-11.98%
Monthly VaR:
-23.97%
How Much Can the price of
CNXN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-83.02%
This translates to price declining to:
$37.96
This translates to price declining to:
$8.14
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
CNXN is a 69.15% riskier investment compared to the market/S&P 500 & is 44.91% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -3.34% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CNXN
Beta in relation to market/S&P 500--0.62
Expected beta in 1 year's time:
0.58
Expected beta in 3 year's time:
0.821
Unlevered (debt free) Beta:
0.615
Beta in relation to Nasdaq (XNAS):
0.464
Beta in relation to all global stocks::
0.476
Beta Comparison & Analysis
Beta of competitors/peers::
1.385
Beta is -55.31% lower than peers
Average Industry Beta:
1.187
Beta is -47.87% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
6.52%
Sustainable growth rate is -45.56% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.000
Alpha is -101.86% below industry average alpha yield
Alpha is 3% compared to market & is healthy
Analysis of Cost of Capital of
CNXN
Equity cost of capital:
0.074
Equity cost of capital is -34.51% below industry mean WACC
Unlevered (without debt) cost of capital:
7.34%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$115.86
Revenue growth rate per share of (3Y):
1.79
Annual revenue growth rate is -60.12% below industry average
EPS:
$3.09
Expected Annual growth rate of EPS (3Y):
-5.30%
Expected future EPS growth rate is -138.52% lower than the Electronics & Computer Distribution industry
Free cash flow (FCF) per share:
$0.12
Balance sheet equity growth per share: 286.84%
Equity growth rate per share is 374.52% higher than the industry
Debt per share
$0.23
EBITDA per share
$4.74
Valuation Analysis Today of
CNXN
P/E Ratio:
14.12
P/E Ratio of Competitors/Peers:
235.7
P/E ratio is -94.01% lower than main peers & is 16.37% higher than the industry
Stock price/value with industry average P/E ratio: $37.50
CNXN is 27.87% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.41
Price to sales ratio is -17.77% below the industry mean
P/B (Price to book value ratio):
1.79
Price to free cash flow: 399.04
-
Net income growth rate (3Y):
10.38%
Net income growth rate is -122.92% lower than the industry average net income growth rate
Dividend Analysis
-
Dividend yeild: 3.42%
Previous Dividend: $1.00
Previous adjusted dividend: $1.00
Previous Dividend: $1.64
Expected next dividend best case: $2.58
Expected next dividend worst case: -$0.58
Average dividend payment (long-term): $0.55
Average dividend increase/decrease (growth rate) % per period: 106.25%
Expected next dividend payment date: 03/03/2022
Expected next dividend record date: 16/02/2022
Expected next dividend declaration date: 02/02/2022
Previous dividend payment date: 12/03/2021
Previous dividend record date: 18/11/2021
Previous dividend declaration date: 11/04/2021
Dividend History:
2021-11-17--$1.00
2019-12-26--$0.32
--$0.00
2021-01-11--$0.32
--$0.00
--$0.00
Dividend growth rate is 70.50% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
0.86%
Net debt to equity ratio:
-8.69%
Debt to assets ratio:
0.55%
Net debt to assets ratio:
-5.57%
Debt-to-asset ratio is -98.99% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
-49.93%
Annual debt growth is 181% higher than industry average debt growth rate
Debt repayment rate in last quarter: 18.56%
Analysis of Key Statistics
Correlation of price movement with the market:
0.353
Statistical significance of correlation:
CNXN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.551
Stock price is -35.86% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.551
Correlation of price movement with Nasdaq (^IXIC):
-0.002
Covariance of price movement with the market:
-0.003
Kurtosis
18.829
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-1.605
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
CNXN
Gross Profit Margin Ratio:
65%
Operating Profit Margin Ratio:
3.70%
Operating profit margin is 149.89% higher than the industry
Net Profit Margin Ratio:
65%
Effective Tax Rate:
27.57%
Effective tax rate is 78.26% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
11.55%
Return on equity (ROE) is 19.03% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.40%
Return on assets (ROA) is 87.62% higher than the industry
Financial Leverage:
1.0x
Current Ratio:
2.57
Current ratio is 28.87% above industry average
Cash Conversion Cycle (days):
42
Cash conversion cycle is -37.10% below industry average
The remaining useful life of property plant & equipment is: 15.3 years
Stock based compensation to net income ratio:
1.70%
In-depth Efficiency Analysis
Revenue generated per employee:
1.2M
Each employee generates -16% less revenue than industry average revenue per employee
EBITDA generated per employee:
49.0K
Each employee generates -25% less EBITDA than industry average revenue per employee
Profit generated per employee:
32.1K
Each employee generates -21% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 16.0K
Each employee generates 27% more free cash flow than industry average revenue per employee
Assets/Capital per employee
59.0K
Each employee generates 27% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CNXN
AGILYSYS, INC. (XNAS:AGYS)
IMPINJ, INC. (XNAS:PI)
OPERA LIMITED (XNAS:OPRA)
GREENSKY, INC. (XNAS:GSKY)
LORL
ChipMOS TECHNOLOGIES INC. (XNAS:IMOS)
RADWARE LTD. (XNAS:RDWR)
CEVA, INC (XNAS:CEVA)
VUZIX CORPORATION (XNAS:VUZI)
Current Analyst Ratings
Strong buy�4%
Buy�4%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
3.04B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.55B
492.37M
-
263.20M
370.93M
12.00M
9.00M
379.93M
-
-
12.03M
124.57M
112.53M
81.51M
112.54M
31.03M
81.51M
Statement of Cash Flow
Date:
Period:
2.99M
Differed Income Tax :
-
Stock Based Compensation :
1.38M
Change in Working Capital :
- 65027.00K
Accounts Receivables:
- 27177.00K
Other Working Capital:
-
Other Non-Cash Items:
577.00K
Net Cash Provided by Operating Activities:
- 38285.00K
Investments in PP&E:
- 2451.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
67.41M
-
67.41M
634.14M
234.60M
14.59M
950.74M
70.04M
73.60M
5.56M
-
-
878.00K
150.08M
-
1.10B
271.41M
-
-
-
98.39M
369.80M
6.08M
179.00K
25.53M
-
395.34M
290.00K
627.56M
-
-
March 31, 2022 at 6:00:00 AM
2.93B
705.48M
1.10B
-
6.08M
- 61332.0K
-
-
- 2451.00K
- 1385.00K
-
-
-
1.22M
- 165.00K
-
- 40901.00K
67.41M
108.31M
- 38285.00K
- 2451.00K
- 40736.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CNXN
2023
2024
2025
2026
2027
$50.19
$222.88
$232.15
$241.81
$251.87