Best (And Worst) Q3 Channel Stocks

Best (And Worst) Q3 Channel Stocks

It was a tough quarter on Wall Street, period. But channel stocks were especially hurt during the three-month period ended Sept. 30. Of 14 companies tracked by CRN, all saw their stock price decline from June 30 to Sept. 30 and 12 of the 14 posted double-digit declines, including nine by at least 14 percent. For comparison purposes, during the same period the Dow Jones and Nasdaq indices dropped 12.1 and 12.9 percent, respectively.

Here's a closer look at third-quarter channel stocks performances:

Arrow Electronics

Sept. 30, 2011: $27.78
June 30, 2011: $41.50
Change: -33.1%

Arrow Electronics reported solid 2Q financials, but it had the misfortune of reporting them right smack in the middle of the July 21-Aug. 8 period where the stock market fell dramatically. Arrow's shares went up 28 cents the day after its earnings, but shares had already fallen $7 in the quarter and would fall another $7 before the end of September.

Sapient

Sept. 30, 2011: $10.14
June 30, 2011: $15.03
Change: -32.5%

Since issuing a 35-cent-per-share dividend on Aug. 11, Sapient's shares have been relatively stable, trading between $10 and $11, but it hasn't regained any market capitalization lost during the crazy July period.

PC Mall

Sept. 30, 2011: $5.28
June 30, 2011: $7.78
Change: -32.1%

PC Mall shares fell $1.17 to $5.90 on Aug. 10, a day after the company released its second-quarter earnings. PC Mall is also one of Hewlett-Packard's largest PSG partners, so it's possible investors worried about that group's future also have concerns on the impact to PC Mall.

ScanSource

Sept. 30, 2011: $29.56
June 30, 2011: $37.48
Change: -21.1%

ScanSource shares closed as low as $27.99 on Sept. 22, so the distributor did make some gains near the end of the third quarter.

Avnet

Sept. 30, 2011: $26.08
June 30, 2011: $31.88
Change: -18.2%

Avnet shares saw some deep spikes and troughs in the last month of the quarter, closing as low as $24.50 (Sept. 6) and as high as $27.94 (Sept. 19) before settling at $26.08. In late September, Avent launched new data center lifecycle services that VARs can offer to their customers.

Synnex

Sept. 30, 2011: $26.20
June 30, 2011: $31.70
Change: -17.4%

Synnex shares got a little boost in late September after closing as low as $23.30 on Aug. 19. Shares increased $2.35 to $27.26 on Sept. 28 after reporting solid earnings and saying that HP business wasn't disrupted by potential changes to PSG.

GTSI

Sept. 30, 2011: $4.59
June 30, 2011: $5.38
Change: -14.7%

Shares of GTSI fell below the $5 mark on Aug. 8 amid a big Wall Street selloff and did not approach that mark the rest of the quarter. Its $4.59 close on Sept. 30 was its highest point since Aug. 12.

Insight Enterprises

Sept. 30, 2011: $15.14
June 30, 2011: $17.71
Change: -14.5%

Insight's shares closed as high as $19.52 on Aug. 29, but September was a cruel month for the solution provider, which lost more than $4 per share during that period. Also in September, Insight agreed to purchase professional services firm Ensynch.

Agilysys

Sept. 30, 2011: $7.13
June 30, 2011: $8.34
Change: -14.5%

Like Insight, Agilysys was also having a strong quarter until September. Its shares closed as high as $9.50 on Aug. 29 but fell below $9 on Sept. 20 and $8 two days later. In early August, Agilysys completed the sale of its Technology Solutions Group to OnX Technology for $64 million.

Accenture

Sept. 30, 2011: $52.68
June 30, 2011: $60.42
Change: -12.8%

Accenture shares closed below $50 as recently as Sept. 9 but regained some momentum towards the end of the third quarter. The company's stock performance may have been boosted by strong fourth-fiscal quarter financial results.

Tech Data

Sept. 30, 2011: $43.23
June 30, 2011: $48.89
Change: -11.6%

Tech Data shares closed as low as $41.26 on Aug. 22, but then reached $48.29 on Sept. 16 before falling back to $43.23 at the end of the third quarter. One of the distributor's bigger announcements in the quarter was its new agreement to distribute IBM's cloud products and services to solution providers.

Ingram Micro

Sept. 30, 2011: $16.13
June 30, 2011: $18.14
Change: -11.1%

Though its stock fell 11.1 percent in the third quarter, it appears investors believe in the changes broadline distributors Ingram Micro (as well as Tech Data) are making to develop their businesses because the loss was less than the market average for the same period. An example: during the quarter Ingram unveiled a new partner network for VARs specializing in the health-care market.

PC Connection

Sept. 30, 2011: $7.98
June 30, 2011: $8.28
Change: -3.6%

Though it ended the quarter down 3.6 percent, PC Connection's stock had been on track for a quarterly gain until Sept. 20. In early August, the Merrimack, N.H.-based solution provider announced that Tim McGrath would succeed Patricia Gallup as CEO. Gallup is now executive chairman and chief administrative officer.

INX

Sept. 30, 2011: $6.94
June 30, 2011: $7.06
Change: -1.7%

INX had the best 3Q stock performance of all channel companies measured here by CRN, but its stock reached as high as $8.25 on July 25. Shares have hovered around the $7 range since mid-August after losing more than $1 per share on Aug. 16, a day after INX released its last quarterly financials.