Maybe it's just me, but CDW Corp. (NASDAQ:CDWC) has one of those names that don't exactly stick in my mind. I guess I have a problem with acronyms when I can't remember what they stand for. (Note: After publication, several readers have kindly pointed out that CDW originally stood for Computer Discount Warehouse -- which makes CDW an acronym I'm no longer likely to forget!)
However, judging by the second-quarter numbers CDW released today, it looks like whatever CDW stands for, it's doing a fine job of it.
CDW provides technology products and services for business, government, and educational clients. CDW may sound like a generic name, but when you dig deeper, it turns out the company is a direct marketing distributor of branded products from some of the biggest names in tech, such as Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), and IBM (NYSE:IBM) -- to name just a few.
The company, which actually just recently celebrated its 20th anniversary, focuses on selling these products to small- and medium-sized businesses, and one of its claims to fame is customer service. For example, it's known for walking its customers through upgrades. (Upon doing some deeper exploration, I realized that CDW is the name behind macwarehouse.com -- a retailer I'm well familiar with, being a Mac person.)
CDW said today that its second-quarter net income increased 15.1% to $67.1 million, or $0.80 per diluted share. Revenues increased 11.3% to $1.54 billion. CDW said the nice earnings uptick was the result of strong demand for PCs, as well as its belief that it is swiping some market share from competitors, which include Insight Enterprises (NASDAQ:NSIT), PC Connection (NASDAQ:PCCC), and Systemax (NYSE:SYX).
Gross margin dropped just a hair to 15.4% from 15.5% at the same time last year, which the company linked to reduced customer fees for delivery, insurance, and handling, as well as to a lower level of vendor incentives as a percent of sales.
A stock that Tom Gardner selected for Motley Fool Stock Advisor, CDW has also recently repurchased shares and paid out a dividend, leaving it with $500 million of cash and short-term investments on its balance sheet.
CDW may not have the sexiest name around, and it arguably flies below the radar when it comes to the buzz that follows so many better-known stocks, but today's results obviously gave investors a reason to think about those three letters. CDW has been trading at a forward P/E of 19, which doesn't sound too terribly pricey either. Given today's solid second quarter, it stands to reason that investors might want to take a closer look at CDW.
To find out more about CDW and the many other stocks Tom and David Gardner have highlighted for Motley Fool Stock Advisor , click here .
Alyce Lomax does not own shares of any of the companies mentioned.
