The Stockopedia Investment Club has had some good results from technology-related stocks in the past, but the sector is under-represented in the portfolio. One of the few tech companies that passes our basic screening rules is enterprise IT infrastructure group, Computacenter (LON:CCC).

Computacenter is an interesting prospect; it’s a large-cap with a promising growth profile. And while its margins are only modest, there’s a lot to like about its financial strength, market position and company culture.

While an IT reseller is unlikely to attract frenzied popularity or see the kind of explosive rerating you can sometimes get in more disruptive tech plays, its dependability is appealing. Jack explored the investment case for the stock in 2020 and it was pitched to the SIC on 6 April.

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Summary

Bull Points: Well financed, strong market position, good management, tech exposure, growth ambitions, could benefit from a post-Covid spending surge

Bear Points: Thin margins, competitive market, acquisitive growth overseas could be risky, doesn’t catch the imagination like other tech stocks


Profile

Computacenter is a Software & IT Services group in the Technology sector. It describes itself a leading independent technology partner trusted by large corporate and public sector organisations. Its target market is the largest 500 corporate and government organisations in the countries where it operates. By handing over the sourcing and management of their IT systems to Computacenter, those customers can focus on their core businesses.

Computacenter employs 16,000 staff and has three main service offerings: technology sourcing, professional services and managed services. It sums these up as helping customers to source, manage and transform their technology infrastructure.

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A share price of ~2600p gives the stock a market cap of £3.0 billion. Stockopedia views it as an Adventurous, Large Cap, Super Stock, with a Quality Rank of 90, a Value Rank of 65 and a Momentum Rank of 68. That gives it an overall StockRank of 90.

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About the opportunity

While Computacenter isn’t exactly a classic ‘fast grower’, it is growing reasonably well for such a large business. Sales have grown at an annual compound rate of 12.2% over the past five years. It appears to be well managed, very profitable and has a strong cash position. The stock looks reasonably priced (in a…

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