The Best And Worst Channel Stocks of 2010 (So Far)

Channel Stocks Hurtin' For Certain In First Half

It was a tough six months for most public companies, as both the Dow Jones (down 6.3 percent) and Nasdaq (down 7 percent) indices posted decreases compared to the year-end closing price last December 31. But channel stocks felt the pain even worse. Of the 10 reseller stocks polled here, seven of them fared worse than the overall stock market from January 1 to June 30, 2010.

Arrow Electronics

June 30, 2010: $22.35
Dec. 31, 2009: $29.61
Change:-24.5 percent

During the second quarter, Arrow acquired Sphinx Group, a United Kingdom-based security and networking distributor and reported solid first-quarter earnings in May, but Wall Street still wasn’t a big fan during the second quarter.

Tech Data

June 30, 2010: $35.62
Dec. 31, 2009: $46.66
Change: -23.7 percent

Tech Data revamped its Web site in the second quarter and reported solid first fiscal quarter earnings.

PC Mall

June 30, 2010: $4.00
Dec. 31, 2009: $5.22
Change:-23.4 percent

PC Mall’s Sarcom subsidiary purchased the assets of Network Services Plus on June 8 for about $7.8 million, but its stock still fell more than 20 percent over the first half of the year.


June 30, 2010: $24.11
Dec. 31, 2009: $30.16
Change:-20.1 percent

Avnet announced a new ’CloudReady’ initiative in May and Rick Hamada added the role of president to his title.

A few weeks later Cisco Systems authorized Avnet to configure UCS servers on behalf of solution providers.


June 30, 2010: $25.62
Dec. 31, 2009: $30.66
Change:-16.4 percent

Synnex beat expectations for its second-fiscal quarter but also noted that product shortages, particularly around networking gear, televisions and printer consumables, may have impacted revenue.

The distributor is also in the process of creating a single, integrated back-office system with solution providers to improve partner relationships.

Ingram Micro

June 30, 2010: $15.19
Dec. 31, 2009: $17.45
Change:-13.0 percent

Ingram Micro lost its president and another well-known, longtime executive in the second quarter but also launched a cloud program with Amazon, and Rackspace.

PC Connection

June 30, 2010: $6.06
Dec. 31, 2009: $6.75
Change:-10.2 percent

PC Connection promoted Timothy McGrath to president and COO in May. McGrath joined the Merrimack, N.H.-based VAR in 2005 and most recently served as executive vice president of PC Connection Enterprises.


June 30, 2010: $24.93
Dec. 31, 2009: $26.70
Change:-6.6 percent

ScanSource held its annual Catalyst Telecom Partner Conference during the second quarter, where CEO Mike Baur talked about ScanSource’s plans to integrate Avaya and Nortel solutions and partners.

Insight Enterprises

June 30, 2010: $13.16
Dec. 31, 2009: $11.42
Change: 15.2 percent

During the second quarter, Insight reported Q1 revenue increased 10 percent to $1.05 billion. Sales of hardware were strong in both North America and EMEA (Europe, Middle East and Asia). However, services declined 5 percent in North America.

Bell Microproducts

June 30, 2010: $6.98
Dec. 31, 2009: $3.55
Change: 96.6 percent

Bell Microproducts’ stock rose dramatically as investors anticipated the finalization of its purchase by Avnet for $7 per share, a deal that closed July 6. When the acquisition was announced in late March, Bell Micro had been trading at $5.38.