After a big refresh cycle in 2014, when many corporations and consumers were buying new desktop workstations and laptops, the landscape has drastically changed. That was all but over in the first quarter of this year, and companies that rely on personal computer (PC) sales got hammered. A new report from RBC says that channel checks indicate the June-quarter sales are tracking below expectations, and it could be a case of here we go again.
In the report, the RBC team thinks that four stocks in the firm’s coverage list could experience weakness due to the softer than normal PC sales environment. If that is so, you can bet investors that own the stocks will not be thrilled. One bright side is that this could bode well for the second half of the year, and weakness in the stock could be a buying opportunity.
Here are the four stocks that RBC covers that could see a direct impact.
The company had a very large secondary stock offering last fall that added to the free float. CDW Corp. (NASDAQ: CDW) came back from private equity land with a highly anticipated initial public offering and has gone straight up in price for almost two years. CDW provides information technology (IT) products and services to business, government, education and health care customers in the United States and Canada. It offers discrete hardware and software products to integrated IT solutions, such as mobility, security, data center optimization, cloud computing, virtualization and collaboration.
The RBC team notes the company has 20% of its business exposed to the U.S. market, with no revenue to speak of outside North America.
CDW investors a paid a small 0.7% dividend. The stock is rated Outperform with a $40 price target at RBC. The Thomson/First Call consensus price target is $40.80. Shares closed Friday at $36.72.
Sponsored: Find a Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.