Big Profits from a Surprising Strategy
It’s impressive to see a publicly traded company that sells computers and computer-related hardware shining like a newly-minted gold coin.
During a time when the competition like Dell (Nasdaq: DELL) and Apple (Nasdaq: AAPL) seem to be breaking sales records, a little-known company called Systemax (NYSE: SYX) is making its mark.
The stock is up 41% of the past 30 days, and, are you sitting down? Its one year return is a dazzling 166% plus! What is Systemax doing and what is its future?
Systemax, Inc. operates as a direct marketer of personal desktop computers, notebook computers, computer related products, and industrial products in North America and Europe. It also assembles personal computers and sells them under Systemax, Tiger, and Ultra brands, as well as markets and sells computers manufactured by other companies.
The company offers a range of computer related products, including laser printer toner cartridges and ink jet printer cartridges; recordable disks and magnetic tape cartridges; peripherals that include hard disks, CD-ROM and DVD drives, printers, and scanners; memory upgrades; data communication and networking equipment; monitors; digital cameras; plasma TVs; and packaged software.
Systemax offers various industrial products, including storage equipment, such as metal shelving, bins, and lockers; light material handling equipment that include hand carts and hand trucks; furniture, small office machines, and related supplies; and consumable industrial products, such as first aid items, safety items, protective clothing, and OSHA compliance items.
It serves business customers and individual consumers, including large businesses, small and midsized businesses, educational organizations, and government entities. Systemax markets its products through direct mail catalogs, e-commerce Internet sites, and personalized relationship marketing. The company was incorporated in 1995 and is headquartered in Port Washington, NY.
The Company's multi-faceted marketing plan features Internet, relationship marketing, and inbound catalog sales. Through these channels Systemax offers over 40,000 products to its two million customers. Systemax PCs are touted as "The Perfect PC" for the educated buyer who wants name brand components, warranty and service without paying for massive amounts of advertising.
They target mid-range and major corporate accounts, small office/home office customers, value added resellers, software & internet developers, and networking professionals. These customers are reached via frequent catalog mailings, account relationship marketing, easy to use internet sites, and a variety of promotions.
Distribution is made simple by their growing network of regional distribution centers in North America and Europe. You would do well to visit their web site and discover what a successful business model they have created. The address is as you would suspect: http://www.systemax.com/.
Recently Systemax announced that third-quarter net income more than tripled. Revenue grew by more than 18% to over $575 million. After the glowing third-quarter results were announced the stock jumped almost 20% in one session.
The stock has a market cap of over $565 million dollars and is selling at around 18x earnings. It has backed off its 52 week high and was recently selling for a little over $16 per share. Apparently there is no coverage by brokerage firms or by analysts.
The CEO Richard Leeds and his family are rumored to be major shareholders. It is always nice when some of the biggest individual shareholders are the officers and directors of a company. If they start selling shares usually the alarm bells go off on Wall Street. Yet when they quietly accumulate millions of dollars worth of stock very few will take notice.
If you look at Systemax’s Section-16 insider filing, which just happen to be loaded onto their web site, you can’t help noticing that CEO Leeds holds at least 5 million shares. Rumor has it he and his kin own at least 10% of the company stock, and when the price leaped recently, we have no evidence that he sold any. Do he and his advisors know something we ought to know? We would like to know the answer to that question.
The company is growing its internet sales at a brisk pace. The CEO recently stated in a press release that the internet accounted for 34% of their sales. As internet usage and subscribers worldwide explodes over the next 10 years, can you imagine what might happen to their sales?
There is always a lot that can go wrong with a company and there has been more than one rising star that has sabotaged their own efforts. But this company seems to have some street-smart directors who know how to “sell-sell-sell”…and I’m speaking about their products and not their own shares!
Systemax has been expanding their product offerings and reaching markets in Europe, which just happens to be one of the biggest customer-bases in the world. Their Chief Financial Officer, Steve Goldschein noted that “… the Company’s overall financial condition remains solid as evidenced by its strong cash position and short-term borrowings only in certain European operations.”
Mr. Goldschein noted, “Our efforts to improve the timeliness and accuracy of our financial reporting both by adding personnel and strengthening our systems and procedures are continuing.” The rumor-mill expects the company to report their full year results on time at the end of March 2007.
Let’s keep an eye on this Fortune 1000 company. Any sell-offs of the shares which might drive the price down below the $15 level would be seen by some as a tantalizing buying opportunity.
All we can tell you for sure is that this company says it is making money on selling computers and plans to invest in its own growth. Considering Mr. Leeds impressive stock position, we’d be inclined to believe them.
During a time when the competition like Dell (Nasdaq: DELL) and Apple (Nasdaq: AAPL) seem to be breaking sales records, a little-known company called Systemax (NYSE: SYX) is making its mark.
The stock is up 41% of the past 30 days, and, are you sitting down? Its one year return is a dazzling 166% plus! What is Systemax doing and what is its future?
Systemax, Inc. operates as a direct marketer of personal desktop computers, notebook computers, computer related products, and industrial products in North America and Europe. It also assembles personal computers and sells them under Systemax, Tiger, and Ultra brands, as well as markets and sells computers manufactured by other companies.
The company offers a range of computer related products, including laser printer toner cartridges and ink jet printer cartridges; recordable disks and magnetic tape cartridges; peripherals that include hard disks, CD-ROM and DVD drives, printers, and scanners; memory upgrades; data communication and networking equipment; monitors; digital cameras; plasma TVs; and packaged software.
Systemax offers various industrial products, including storage equipment, such as metal shelving, bins, and lockers; light material handling equipment that include hand carts and hand trucks; furniture, small office machines, and related supplies; and consumable industrial products, such as first aid items, safety items, protective clothing, and OSHA compliance items.
It serves business customers and individual consumers, including large businesses, small and midsized businesses, educational organizations, and government entities. Systemax markets its products through direct mail catalogs, e-commerce Internet sites, and personalized relationship marketing. The company was incorporated in 1995 and is headquartered in Port Washington, NY.
The Company's multi-faceted marketing plan features Internet, relationship marketing, and inbound catalog sales. Through these channels Systemax offers over 40,000 products to its two million customers. Systemax PCs are touted as "The Perfect PC" for the educated buyer who wants name brand components, warranty and service without paying for massive amounts of advertising.
They target mid-range and major corporate accounts, small office/home office customers, value added resellers, software & internet developers, and networking professionals. These customers are reached via frequent catalog mailings, account relationship marketing, easy to use internet sites, and a variety of promotions.
Distribution is made simple by their growing network of regional distribution centers in North America and Europe. You would do well to visit their web site and discover what a successful business model they have created. The address is as you would suspect: http://www.systemax.com/.
Recently Systemax announced that third-quarter net income more than tripled. Revenue grew by more than 18% to over $575 million. After the glowing third-quarter results were announced the stock jumped almost 20% in one session.
The stock has a market cap of over $565 million dollars and is selling at around 18x earnings. It has backed off its 52 week high and was recently selling for a little over $16 per share. Apparently there is no coverage by brokerage firms or by analysts.
The CEO Richard Leeds and his family are rumored to be major shareholders. It is always nice when some of the biggest individual shareholders are the officers and directors of a company. If they start selling shares usually the alarm bells go off on Wall Street. Yet when they quietly accumulate millions of dollars worth of stock very few will take notice.
If you look at Systemax’s Section-16 insider filing, which just happen to be loaded onto their web site, you can’t help noticing that CEO Leeds holds at least 5 million shares. Rumor has it he and his kin own at least 10% of the company stock, and when the price leaped recently, we have no evidence that he sold any. Do he and his advisors know something we ought to know? We would like to know the answer to that question.
The company is growing its internet sales at a brisk pace. The CEO recently stated in a press release that the internet accounted for 34% of their sales. As internet usage and subscribers worldwide explodes over the next 10 years, can you imagine what might happen to their sales?
There is always a lot that can go wrong with a company and there has been more than one rising star that has sabotaged their own efforts. But this company seems to have some street-smart directors who know how to “sell-sell-sell”…and I’m speaking about their products and not their own shares!
Systemax has been expanding their product offerings and reaching markets in Europe, which just happens to be one of the biggest customer-bases in the world. Their Chief Financial Officer, Steve Goldschein noted that “… the Company’s overall financial condition remains solid as evidenced by its strong cash position and short-term borrowings only in certain European operations.”
Mr. Goldschein noted, “Our efforts to improve the timeliness and accuracy of our financial reporting both by adding personnel and strengthening our systems and procedures are continuing.” The rumor-mill expects the company to report their full year results on time at the end of March 2007.
Let’s keep an eye on this Fortune 1000 company. Any sell-offs of the shares which might drive the price down below the $15 level would be seen by some as a tantalizing buying opportunity.
All we can tell you for sure is that this company says it is making money on selling computers and plans to invest in its own growth. Considering Mr. Leeds impressive stock position, we’d be inclined to believe them.
posted by Marc Mentor at 10:28 PM
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