Anixter Didn’t Have a Great 1Q, But Market Reaction Is Way Overblown; Shares Are Deeply Undervalued
Anixter’s stock plunged 23% on April 26 after the narrow-moat distributor reported uninspiring first-quarter results. The company’s organic revenue growth (up 1.6% organically) was unremarkable and its GAAP operating margin contracted 50 basis points to 3.1%. However, Anixter’s first-quarter performance did not warrant the massive sell-off, in our view. Yes, it wasn’t a great quarter for the firm, but by our estimates, management’s 2018 guidance remains achievable. Furthermore, we continue to be...Anixter International is engaged in the distribution of network and security solutions, electrical and electronic solutions, and utility power solutions through Anixter Inc. and its subsidiaries. The Network and Security Solutions segment supplies products and customized supply chain solutions. The Electrical and Electronic Solutions segment supplies wire and cable, control, lighting and electrical bulk products and customized supply chain solutions. The Utility Power Solutions segment supplies electrical transmission and distribution products, power plant maintenance, repair and operations supplies and smart-grid products, and arranges materials management and procurement outsourcing.
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