Replies to post #45955 on Savvy Trades and Investments

[researcher59]

PCMI - if you go back to 2016, they gave strong guidance for that year, raised it after Q1 and ultimately beat their raised guidance by a wide margin .... not saying that will happen again and obviously recent results are far more relevant, but at $8 the stock is very pessimistically priced. A year ago the stock was $26 and rose to $28 on the same guidance for EPS of ~$2.

I like the risk/reward at $8. Yeah, it could be heading for $5, but $20 is also possible. jmho

[hweb2]

Agreed on PCMI and am surprised so many others on the board are willing to give them a pass. Here's the guidance they gave in the Q4 report last year:

Commenting on PCM’s outlook, Khulusi stated, “It’s a great time to be at PCM, and we’re better positioned than ever for the future. Looking ahead, for the first quarter, we expect adjusted EPS in the range of $0.20 to $0.24 on net sales of $515 million to $530 million. For the year, we currently aim to deliver net sales of $2.34 billion to $2.38 billion and adjusted EPS of $2.00 to $2.15, with adjusted EPS ramping sequentially for each of the quarters of this year, as these incremental investments begin to bear fruit.”

They missed that by a mile. So how can you trust what they say about 2018??? After that bullish forecast, PCMI only earned an adjusted $1.20/share for 2017. Down from $1.89/share the year before. Yes $1.20 is still good for a stock trading in the $8's. But Q1 & Q2 were solid quarters, while Q3 & Q4 were alarming disappointments. They missed their own estimates badly. In the Q2 earnings PR, they were expecting Q3 adjusted earnings of .56-.62/share. They came in at .34/share. Q4 even worse. Gave guidance for Q4 adjusted earnings of .55-.61/share. Came in at only .17/share. Keep in mind Q4 is typically one of their strongest quarters of the year. Annualize that .17/share to .68/share and the stock doesn't look so cheap. Those are 'adjusted' earnings too, GAAP earnings lower. PCMI will trade at a sharp discount anyway due to its low margin sector and lack of growth. The deteriorating balance sheet won't help either.

Not sure why PCMI is struggling while the economy & tech sector are booming. What happens when those cool off. That $2 guidance looks like pie in the sky at this point. As littlefish pointed out, there's only a few weeks left in Q1 yet they gave no Q1 guidance. Maybe these guys should just stay out of the guidance business since they're so lousy at it. I wouldn't believe anything they say at this point. Sick of the overpromise & underdeliver routine. Ok Q1 sounds like it could be off to a promising start. Revenues are actually above that 5% target so far according to the CC. But Q1 is seasonally weak and who knows what the bottom line will look like. I wouldn't hold my breath on the SG&A cuts saving the day. Remember how they cut $12M in costs at the end of Q3. Well that sure didn't help Q4!

Hope it works out for those remaining. I was happy to bail AH. Nice pop this week from $7 to $9. Maybe it'll jump even more tomorrow. But I think eventually PCMI will resume its slide after those terrible Q4 results. Back to the $7's or lower. I won't be rushing to buy back in. Until this bumbling management team can show me they can turn this thing around.

[nelson1234]

lf, PCMI, I'm SMH (shakin' my head) as well. Almost every poster on this board who was long PCMI going into earnings had stated that they expected earnings to stink based on the collapse of PCMI's shareprice, and thus were solely holding based on the hope that guidance would be strong....just look at the posts.

And then, thats exactly what happened, earnings were very poor as expected, but guidance both short and long term were much stronger than expected...

....and now some are feigning discontent that earnings were weak, and thus PCMI cant be trusted? I mean, again, we all knew earning would be weak, so why the sudden surprise?

I actually thought earnings would be much worse, or even worse, that guidance would be poor.

Now I dont know if the stock will go up or down....it made a nice move off seven bucks and I dont begrudge anyone from selling (I actually sold some trading shares afterhours yesterday), but it seems to me we got just about as good as we could expect; and if things work out than PCMI is very undervalued and could move up towards $16+ later this year. All the while knowing their are risks.....as I stated in an earlier post, A/R and Inventories are poor, and PCMI has missed three quarters...but the share price is at $8, a backward p/e of 6.5 and a forward p/e of 3.9 given guidance for '18, so its not like crap isnt reflected in the share price already.

best.