Thoughts on DDR / DTL for AI please

Hi Maureen,

Dicker Data (DDR) $9.44 – the second mention for the hardware & software wholesaler  DDR today, as we said previously the stock has trended lower since 2021 and we wouldn’t be surprised to see it retest $8. Its yield in excess of 5% seems attractive, however a stock paying a large proportion of earnings as a dividend, we doubt, will be at the forefront of AI.

• The Q1 sales released last month was a miss and the stock fell accordingly.

Overall we do believe DDR is a well-run business and one quarter does not make a trend; however, the quantum of the sales decline combined with the founder selling in March
(10% of DDR’s issued capital to settle a divorce) could limit investor interest until a rebound in sales is visible.

Data#3 (DTL)  $8.20 has experienced a tough 2024 after  Februarys result missed consensus earnings by -6% which saw the stock plunge 20% and it’s struggled to recover since. We believe the stocks fair value ~$8 while its premium to DDR and offshore reseller comps, is fair given DTL’s relatively defensive revenues, higher returns on capital and strong cash flow profile.

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Dicker Data (DDR)

LAST UPDATED 07/06/2024 13:06

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Dicker Data (DDR)

LAST UPDATED 07/06/2024 13:06