The Best And Worst Channel Company Stocks Of 2015

Channel Stocks: Gainers And Losers Evenly Split In 2015

For the 25 publicly traded solution providers and distributors on our watch list, 2015 was a mixed bag. Thirteen saw the value of their stocks grow during the year -- some by double digits -- while 12 recorded stock price declines.

How does that compare to the stock market overall? Last year was definitely a mixed bag with the Dow Jones Index down 2.23 percent in 2015 while the Nasdaq was up 5.73 percent.

Here's a look at who was up and who was down in 2015 starting with companies with the biggest gains in share price, based on stock closing prices between Dec. 31, 2014 and Dec. 31, 2015

ePlus Technology

CEO: Phillip Norton

Dec. 31, 2014: $75.69

Dec. 31, 2015: $93.26

Change: +23.21%

EPlus Technology, No. 32 on the 2015 CRN Solution Provider 500, recorded the biggest gain in share price in 2015 among the 25 companies on our channel stock watch list.

For the first six months (ended Sept. 30) of the company's fiscal 2016, ePlus reported consolidated net sales of $606.2 million, up 6.4 percent from $569.8 million in the same period one year before. Net earnings grew 14.3 percent to $24.5 million for the first half of fiscal 2016 from $21.4 million in the same period one year earlier.

In August the Herndon, Va.-based company said it would buy back up to 500,000 shares of its outstanding common stock over a 12-month period.

In December ePlus Technology, the solution provider's technology subsidiary, boosted its security technology portfolio by acquiring Hartford, Conn.-based solution provider IGX.

CDW

CEO: Thomas Richards

Dec. 31, 2014: $35.17

Dec. 31, 2015: $42.04

Change: +19.53%

For the first nine months of 2015, solution provider CDW reported sales of $9.57 billion, up 6 percent from the same period in 2014. Net income for the nine months soared nearly 63 percent to $313.8 million.

In November Vernon Hills, Ill.-based CDW, No. 6 on the 2015 CRN Solution Provider 500, said it expected that an expanded partnership with Dell, unveiled in October, would add $200 million to the company's sales in 2016.

Accenture

CEO: Pierre Nanterme

Dec. 31, 2014: $89.31

Dec. 31, 2015: $104.50

Change: +17.01%

Systems integrator Accenture, No. 2 on the 2015 CRN Solution Provider 500, pursued an aggressive acquisition strategy in 2015. Most notable was the company's blockbuster deal in September to acquire pioneering cloud services provider Cloud Sherpas in a move that expanded Accenture's cloud services portfolio, especially in the Salesforce.com and Google cloud application arenas.

That followed deals in August to acquire Schlumberger Business Consulting and Total Logistics with services in oil/gas management and retail supply chain management, respectively. Accenture's February acquisition of Agilex likewise boosted its service portfolio for the public sector.

In December Accenture reported that sales in its fiscal 2016 first quarter (ended Nov. 30) grew 1.5 percent year over year to $8.47 billion. But net income declined 2.6 percent in the quarter to $868.7 million.

SS&C Technologies

CEO: William Stone

Dec. 31, 2014: $58.49

Dec. 31, 2015: $68.27

Change: +16.72%

SS&C, No. 38 on the 2015 CRN Solution Provider 500, bolstered its portfolio for the financial services industry in November when it acquired Primatics Financial Holdings.

For the first nine months of 2015, SS&C, based in Windsor, Conn., reported revenue of $699.4 million, up more than 23 percent from $567.1 million in the same period in 2014. But net income for the nine months was only $30.8 million compared with $94.5 million in the same period in 2014, largely due to a $34.6 million loss in the third quarter.

Synnex

CEO: Kevin Murai

Dec. 31, 2014: $78.16

Dec. 31, 2015: $89.93

Change: +15.06%

Distributor Synnex struck a deal with Dell in August through which Synnex could distribute a wide range of Dell products for the federal government, including servers, storage systems, networking equipment and software, through the Synnex ecosystem of federal resellers.

For the nine months ended Aug. 31, Synnex, based in Fremont, Calif., reported revenue of $9.79 billion, down more than 2 percent from $10.02 billion in the same period one year earlier. But net income surged 19 percent to $146.4 million for the nine-month period from $123.0 million one year before.

Cognizant Technology Solutions

CEO: Francisco D'Souza

Dec. 31, 2014: $52.66

Dec. 31, 2015: $60.02

Change: +13.98%

Cognizant, No. 8 on the 2015 CRN Solution Provider 500, enjoyed strong revenue growth in 2015, fueled largely by the company's booming health-care business. For the nine months ended Sept. 30, the Teaneck, N.J.-based company reported revenue of more than $9.18 billion, up more than 22 percent from $7.52 billion in the same period in 2014. Net income for the nine-month period grew more than 11 percent year over year to $1.20 billion from $1.08 billion.

At year's end Cognizant was reported to be one of several companies competing to buy Dell's Perot Systems business.

Ingram Micro

CEO: Alain Monie

Dec. 31, 2014: $27.64

Dec. 31, 2015: $30.38

Change: +9.91%

Distributor Ingram Micro was in transition in 2015, moving away from low-margin businesses toward higher-value services. That began to pay off later in the year when the company reported a return to profitability in its third quarter (ended Oct. 3), following a $34.3 million loss in its second quarter and the implementation of a $100 million cost-cutting plan that included layoffs of more than 500 employees.

Ingram Micro, based in Irvine, Calif., has also been very active on the acquisition front during the past 18 months. In October, for example, the company bought Grupo Acao, a $300 million Latin America distributor. The same month the company bought the e-commerce fulfillment and payment services of Netherlands-based Docdata in a move to expand its European offerings.

CACI International

CEO: Kenneth Asbury

Dec. 31, 2014: $86.18

Dec. 31, 2015: $92.78

Change: +7.66%

CACI, already a leading solution provider in the federal government space, struck a deal in December to buy the $1.21 billion government services group of L-3 Communications Holdings for $550 million. The acquisition of L-3 National Security Solutions will strengthen CACI's position in the national security space.

Later in December CACI, No. 16 on the 2015 CRN Solution Provider 500, was reported to be in the running to acquire Lockheed Martin's government IT business – a move that would make CACI the largest solution provider in the public sector.

In October CACI reported that in its fiscal 2016 first quarter (ended Sept. 30), revenue grew just less than 1 percent year over year to $822.4 million while net income for the quarter was up nearly 9 percent to $33.8 million.

Tech Data

CEO: Robert Dutkowsky

Dec. 31, 2014: $63.23

Dec. 31, 2015: $66.38

Change: +4.98%

Tech Data's sales and earnings were up and down from one quarter to the next throughout calendar 2015. For the first three quarters (ended Oct. 31) of fiscal 2016, the Clearwater, Fla.-based distributor reported sales of just less than $18.90 billion, down 7 percent from $20.33 billion in the first three quarters of fiscal 2015. Part of that was due to the distributor's exit from some Latin America markets. Tech Data's net income for the first three fiscal quarters, however, soared nearly 80 percent to $169.6 million from $94.5 million in the first three quarters of fiscal 2015.

In June Tech Data acquired Phoenix-based solution provider Signature Technology Group in a move the company said would help it provide services that augment those of its channel partners.

CGI Group

CEO: Michael Roach

Dec. 31, 2014: $38.16

Dec. 31, 2015: $40.03

Change: +4.90%

In October CGI unveiled its Unify360 platform that the Montreal–based solution provider said would provide customers with a comprehensive view of their IT environments, including both on-premise and cloud IT services.

CGI, No. 15 on the 2015 CRN Solution Provider 500, reported sales of $10.29 billion Canadian (U.S. $7.31 billion) for all of fiscal 2015 (ended Sept. 30), down 2 percent from $10.50 billion Canadian (U.S. $7.47 billion) in fiscal 2014. Net earnings for the fiscal year were up nearly 14 percent to $977.6 million Canadian (U.S. $695.3 million) from $859.4 million Canadian (U.S. $611.2 million) in fiscal 2014.

PCM

CEO: Frank Khulusi

Dec. 31, 2014: $9.52

Dec. 31, 2015: $9.93

Change: +4.31%

PCM underwent some significant changes in 2015, including reorganizing its corporate structure, hiring new executives and making several key acquisitions. The latter included the $15 million acquisition of Microsoft licensing partner En Pointe in April, the $12.5 million acquisition of Canadian solution provider Acrodex in October, and the $14 million acquisition of Systemax's North American business-to-business division in December.

For the first nine months of 2015, El Segundo, Calif.-based PCM reported sales of $1.18 billion, up more than 18 percent from $997.1 million in the same period in 2014. But the company, No. 29 on the 2015 CRN Solution Provider 500, reported a loss of $4.1 million for the nine months – largely due to charges for restructuring costs – compared with earnings of $3.9 million in the same period in 2014.

Syntel

CEO: Nitin Rakesh

Dec. 31, 2014: $44.98

Dec. 31, 2015: $45.25

Change: +0.60%

For the first nine months of 2015, Syntel, No. 36 on the 2015 CRN Solution Provider 500, reported revenue of $714.0 million, up nearly 6 percent from $676.1 million in the first nine months of 2014. But net income for the nine-month period was down a fraction of 1 percent to $178.3 million from $179.0 million in the same period one year before.

On Dec. 21 Syntel, based in Troy, Mich., lowered its revenue guidance for all of 2015 because of massive flooding in Chennai, India, that disrupted business at the company's facilities in that city. The company now expects to report sales of between $967 million and $970 million for 2015 compared with earlier guidance of $972 million to $977 million.

ManTech International

CEO: George Pedersen

Dec. 31, 2014: $30.23

Dec. 31, 2015: $30.24

Change: +0.03%

Federal government solutions provider ManTech has been struggling with shrinking sales, largely due to the military drawdown in Afghanistan. As part of the company's turnaround strategy, in April it acquired Welkin Associates, a CSC subsidiary that provides engineering services to the intelligence community and U.S. Department of Defense, for $34 million. In June the company bought cybersecurity adviser Knowledge Consulting Group for an undisclosed sum. And in July it sold its ManTech Cyber Solutions International commercial software division to CounterTack.

For the first nine months of 2015, Fairfax, Va.-based ManTech, No. 24 on the 2015 CRN Solution Provider 500, reported revenue of $1.15 billion, down nearly 16 percent from $1.36 billion in the same period in 2014. Net income for the nine months, however, grew more than 13 percent to $37.2 million from $32.8 million in the same period in 2014.

Avnet

CEO: Rick Hamada

Dec. 31, 2014: $43.02

Dec. 31, 2015: $42.84

Change: -0.42%

Distributor Avnet is the first company on our list to record a lower stock price in 2015.

For its fiscal 2016 first quarter (ended Oct. 3), Avnet reported sales of $6.97 billion, up nearly 2 percent from $6.84 billion in the first quarter of fiscal 2015. The Phoenix-based distributor said sales growth was slow because of the weak PC market and the company's decision to pass on some low-margin deals. Net income for the quarter was up 1.8 percent year over year to $130.9 million from $127.9 million.

In November Avnet unveiled its new cloud marketplace that managed service providers, ISVs and resellers use to resell cloud solutions to their customers.

Ciber

CEO: Michael Boustridge

Dec. 31, 2014: $3.55

Dec. 31, 2015: $3.51

Change: -1.13%

For the first nine months of 2015, Ciber reported revenue of $592.6 million, down 8 percent from just less than $644.0 million in the first nine months of 2014. But the company reported a profit of just less than $5 million for the nine months, a marked contrast to the $22.4 million loss the solution provider recorded in the same period in 2014 when the company was in the midst of a major restructuring.

In August Ciber, No. 37 on the 2015 CRN Solution Provider 500, debuted Ciber Momentum, a software tool the Greenwood Village, Colo.-based company said automatically reconfigures applications for cloud computing.

Insight Enterprises

CEO: Kenneth Lamneck

Dec. 31, 2014: $25.89

Dec. 31, 2015: $25.12

Change: -2.97%

For the first nine months of 2015, Insight Enterprises reported sales of $3.99 billion, up 3 percent from $3.87 billion in the same period in 2014. Net earnings for the period grew 2 percent year over year to $57.3 million from $56.2 million.

The Tempe, Ariz.-based company's third-quarter results were especially strong, driven by federal government contract wins and continued Windows XP refresh activity.

Insight Enterprises is No. 13 on the 2015 CRN Solution Provider 500.

Arrow Electronics

CEO: Michael Long

Dec. 31, 2014: $57.89

Dec. 31, 2015: $54.18

Change: -6.41%

For the first nine months of 2015, distributor Arrow Electronics reported sales of $16.53 billion, up 1 percent from $16.37 billion in the same period of 2014. But net income for the period was down 11 percent year over year to $339.2 million from $381.9 million.

In September Centennial, Colo.-based Arrow unveiled a program to repurchase up to $400 million of common stock, in addition to earlier share repurchase plans.

PC Connection

CEO: Timothy McGrath

Dec. 31, 2014: $24.55

Dec. 31, 2015: $22.64

Change: -7.78%

PC Connection was on a roll in 2015, reporting sales growth and healthy earnings throughout the year – including the third quarter, which the solution provider described as the best in the Merrimack, N.H.-based company's history.

For the first nine months of the year, PC Connection, No. 20 on the 2015 CRN Solution Provider 500, reported sales of $1.89 billion, up more than 3 percent from $1.83 billion in the same period in 2014. Net income was up 8 percent year over year to $33.2 million from $30.7 million.

Perficient

CEO: Jeffrey Davis

Dec. 31, 2014: $18.63

Dec. 31, 2015: $17.12

Change: -8.11%

Perficient has been aggressively acquiring other solution providers in recent years and 2015 was no different. In December the St. Louis-based company bought Enlighten, a 75-person digital marketing agency, for $12 million and in September acquired Market Street Solutions, a business analytics company in the IBM market, for $5.3 million.

For the first nine months of 2015, Perficient, No. 56 on the 2015 CRN Solution Provider 500, reported revenue of just less than $340 million, up 2.8 percent from $330.9 million in the same nine-month period in 2014. Net income for the period was down nearly 8 percent year over year to $15.4 million from $16.7 million.

ScanSource

CEO: Mike Baur

Dec. 31, 2014: $40.16

Dec. 31, 2015: $32.22

Change: -19.77%

ScanSource struck a deal in August to acquire KBZ, a specialty distributor that works with Cisco Systems' videoconferencing products. The move expanded Greenville, S.C.-based ScanSource's growing communications and collaboration products and services operations.

For its fiscal 2016 first quarter (ended Sept. 30), ScanSource reported sales of $870.8 million, up 10 percent from $791.7 million in the same quarter one year earlier. But net income for the quarter was down 17 percent to $16.0 million from $19.2 million one year before.

Systemax

CEO: Richard Leeds

Dec. 31, 2014: $13.50

Dec. 31, 2015: $8.60

Change: -36.30%

Systemax underwent some serious transformations in 2015. In March, after reporting a $37.5 million loss for fiscal 2014, the solution provider revealed plans to shutter its retail business and cut its operating costs -- the latter including significant employee layoffs.

In December Systemax, No. 17 on the 2015 CRN Solution Provider 500, completed a deal to sell the business-to-business assets of its North American Technology Group to PCM for $14 million. That included the coveted TigerDirect brand, a longtime direct marketer of IT products.

For the first nine months of 2015, Systemax, based in Port Washington, N.Y., reported sales of $2.23 billion, down 12 percent from $2.53 billion in the same period in 2014. The company lost $67.3 million in the period, compared with the $12.0 million loss recorded in the first nine months of 2014.

Datalink

CEO: Paul Lidsky

Dec. 31, 2014: $12.90

Dec. 31, 2015: $6.80

Change: -47.29%

Datalink, based in Eden Prairie, Minn., has been growing its consulting and managed services practices in the past two years as it transforms itself into a strategic services provider. The goal is less reliance on its legacy lines of business, such as its slow-growing storage system business.

The strategy appears to be paying off, growthwise. For the first nine months of 2015 Datalink, No. 43 on the 2015 CRN Solution Provider 500, reported sales of $556.0 million, up 25 percent from $443.9 million in the same period in 2014. But net earnings for the nine-month period were just short of $2 million compared with $7.4 million in 2014.

Computer Sciences Corp.

CEO: Mike Lawrie

Dec. 31, 2014: $63.05

Dec. 31, 2015: $32.68

Change: -48.17%

After months of speculation about its future, CSC (No. 5 on the 2015 CRN Solution Provider 500) said in May that it would split into two companies – one focused on its $8.1 billion commercial business and the other on services for the U.S. government public sector. While the initial vision was to create two publicly traded companies, the public sector business was merged with SRA when the split was executed Nov. 27, creating the world's largest pure-play U.S. government security provider.

For the first half (ended Oct. 2) of its fiscal 2016, CSC reported total revenue of $5.47 billion, including $1.92 million from its North American public sector business. That total was down more than 13 percent from $6.32 billion in the first half of fiscal 2015. Net income for the first half of fiscal 2016 was $327 million, up 10 percent year over year from $297 million.

Black Box Network Services

CEO: Mike McAndrew

Dec. 31, 2014: $23.90

Dec. 31, 2015: $9.53

Change: -60.13%

On Dec. 23 the company said that Mike McAndrew would be stepping down as president and CEO in 2016 once a successor is appointed. The company said it hired a national executive search firm to conduct an external search for candidates.

That followed what proved to be a rocky year for Lawrence, Pa.-based Black Box, No. 34 on the 2015 CRN Solution Provider 500. The company's problems included a yearlong sales organization restructuring that failed to produce any gains in revenue or order bookings.

For the first half (ended Sept. 26) of fiscal 2016, Black Box reported revenue of $466.1 million, down almost 6 percent from $494.1 million in the first half of fiscal 2015. The company reported a $129.1 million loss for the first half of the fiscal year compared with net income of $7.1 million in the first half of fiscal 2015.

Unisys

CEO: Peter Altabef

Dec. 31, 2014: $29.48

Dec. 31, 2015: $11.05

Change: -62.52%

By the end of 2014, Unisys had reported declining sales for several years and losses in multiple quarters (but net income in positive territory in 2013 and 2014). Ed Coleman had stepped down as CEO in December and the company, No. 19 on the 2015 CRN Solution Provider 500, began 2015 under new management with Peter Altabef taking over as president and CEO on Jan. 1.

But a turnaround for Unisys remained elusive in 2015. The company continued to rack up quarterly losses – a total of $111.0 million in the first nine months of the year on a 9 percent revenue decline. In April the company announced a $300 million restructuring initiative and plans to lay off 8 percent of the company's workforce.

By year's end Unisys executives said the company's cost-reduction plan was on track. But in a third-quarter conference call with financial analysts in late October, Altabef acknowledged that Unisys' turnaround was going to take time. The company's stock lost more than 62 percent of its value in 2015.