Stock of the Week: This Global IT Leader Is Ready to Break Out

|September 11, 2023

A Note From Amanda: Time is running out! In just two days, Alpesh is going live with the shocking results of his experiment with ChatGPT. See how he uses AI to help target winning stocks – and how YOU can use it to help juice your returns. He’ll reveal it all in the AI Super Trader Summit on Wednesday, September 13, at 2 p.m. ET.

Click here to sign up for this FREE event!

More and more of our consumer-driven economy is moving online… and companies have to keep up with the ever-changing demands.

That means finding business partners that can help them evolve along with technology.

The global IT leader I have for you today is a one-stop shop for a business’s technology needs. From hardware and security to analytics and the Internet of Things… this Stock of the Week does it all.

And $60 billion in revenue is proof it does the job well.

Earnings have grown by double digits… and the company’s profits have surged to a record $4 billion.

The stock is trading at a dirt-cheap forecast P/E… and is undervalued by nearly 60%. While shares have traded sideways since 2022… the charts tell me momentum has shifted and the stock is ready to break out.

And here’s the key piece in all this…

The company hasn’t started talking about AI… yet. When it does… the stock could go vertical.

Get all this details on the company – including its ticker – in this week’s video.

Click on the image below to watch it.

Note: Be sure to join me on Wednesday, September 13, at 2 p.m. for my AI Super Trader Summit. We’ve all heard that ChatGPT can do some amazing things… but I’ve been stunned by the results of using it as part of my GVI strategy. I’m going to share it all with you at this FREE online event. Don’t miss it!

Click here to reserve your spot.


See How I’m Using ChatGPT to Help Target Winning Stocks
Join Me at My FREE AI Super Trader Summit!

Hi, friends. It’s Stock of the Week time… that exciting time of the week when I tell you what my team in the hedge fund has narrowed down for me to look at and share with you.

We’ve got another really good one, which I’m excited about.

I’m Alpesh Patel, as you know. I’m the founder of GVI Investor and the founder of a hedge fund as well.

And the Stock of the Week this week is TD Synnex (SNX). Now, this company caught my eye for the same reason all companies do each week, which is the financials. But there’s a story behind it as well.

So before we get to the financials, let’s look at the story.

Its edge-to-cloud portfolio is anchored in many technology segments, including cybersecurity, big data analytics, mobility, the Internet of Things and other hybrid solutions as a service, including software as a service.

Now, the company has not mentioned AI. I bet you it’s going to start mentioning AI. And I bet as soon as the company starts mentioning AI, the stock price goes up.

So it caught my eye – not because it’s in the space of cloud cybersecurity and data analytics, but because of the numbers.

The company was founded in 1980… well before any of these things even existed, of course. The company was formerly known as Synnex. Slight name change.

It has revenue of $60 billion. How is it that there are companies out there I’ve not heard of with revenue in the billions? I don’t mean $1 billion, $2 billion… I mean $60 billion.

Earnings, or profits, have grown by nearly 15% per year over the past five years. In terms of profitability – despite a decline in revenue, we’ve got to keep an eye out for some of those sort of red or amber flags – gross profits have surged to a new record.

So there we go with that.

Now let’s have a deeper dive into some of those numbers then, shall we?

On my proprietary Growth-Value-Income scoring mechanism – which looks at the valuation of a company, the growth of a company, its dividend yield – this has got a 9 out of 10.

Remember, anything with a 7, 8, 9 or 10 meets my minimum requirements and is great.

Forecast P/E ratio… For a tech company with all the keywords and buzzwords I just mentioned and some of the profits I’ve mentioned… the forecast P/E is only 9.6.

In other words, its shares are trading at a multiple of 9.6 times its forecast profits. That’s cheap for tech, as you well know.

Maybe one reason, and it’s just one small amber flag, is its cash return on capital invested (CROCI) is -1.2%.

Now, as you know, CROCI is important. Click here to see why… and why Deutsche Bank and Goldman Sachs use it. But -1.2% is a little bit of a worry.

The stock is up over the past six months, so we’ve got some good momentum.

Sortino, a measure of average return versus the risk of missing it to the downside, is 0.49. I want it to be above 1.0, but any stock above 0.3 I’m happy with.

Volatility is well below 20%. That’s good. I like the lower volatility side as well.

The stock hasn’t really been outperforming the market. So I think there’s room for improvement here.

In fact, since about the middle of 2021, it’s gone pretty much down to sideways. So you might say, “Why the heck are you sending this to us, Alpesh, if it’s only done that well?”

I think the momentum is now shifting. When I look at the monthly momentum, at some of those numbers, I think the momentum is now shifting. I think it’s starting to create this U-shape, where it’s now bottomed out and is starting to rise. And indeed it’s up some 33% anyway from the lows it hit in 2022. So I think that momentum is there.

I’m also excited by the fact that on a discounted cash flow basis, it’s nearly 60% undervalued. So if it gets to fair value, we make a good return.

And as I’ve said, earnings, or profits, are forecast to grow – they’re forecast to grow 19.35% this year. In any event, they grew 35% last year.

The reason I think cash return on capital invested has suffered a bit is that there’ve been some large one-off items which have impacted the company’s results. So that might be a bit of an outlier there.

That’s my Stock of the Week.

I hope you enjoyed it. I know I mentioned AI. You just can’t do a video or turn on the TV without mentioning it. But hey, if there’s money to be made with it, we’ve got to mention it.

That’s why you don’t want to miss my free online event on Wednesday. I’m going to show you how AI can help you target winning stocks. Reserve your spot here.

Thank you very much.