I recently published an investment thesis exclusive to the investment platform, Seeking Alpha, where I will be covering recent and forthcoming initial public offerings (IPOs). The article is on global IT distributor, Ingram Micro Holding Corporation (INGM). From the executive summary of the article is the following:
- Ingram Micro operates in a massive, growing IT market but has failed to translate this into revenue or margin growth, despite strategic investments.
- The company’s transition to a platform model is hampered by its capital-intensive physical logistics, limiting profitability and scale economies.
- Current valuation assumes optimistic growth, but reverse DCF analysis shows significant downside risk if recent trends persist.
- Given persistent thin margins, lack of differentiation, and unattractive returns, I recommend a ‘Sell’ rating on INGM stock.
The rest of the article is available here.