Not every company that does well selling on the internet is named Amazon (AMZN) . Some success stories started before the internet existed, and have effectively transitioned to online selling. They often address niche markets that serve them well over long periods of time.
One of these is PC Connection (PCCC) , founded in 1982 when personal computers were largely coveted by hobbyists, mobile phones were luggage sized and smart watches were worn only by Dick Tracy and his colleagues.
But PC Connection persevered and has prospered in the intervening years. The company has three divisions: PC Connection Sales, which provides IT products and services primarily to small and mid-sized businesses; MoreDirect, a supplier of IT solutions and IT supply chain expertise; and GovConnection, which addresses federal, state and local government and educational markets with IT products and services. The company offers more than 300,000 brand-name products from hundreds of vendors.
I choose my recommendations by relying on investment strategies modeled after well-known Wall Street gurus. Having one strategy give a stock a high grade qualifies as it recommendation-worthy, but PC Connection earns high grades from two strategies. That is a very strong endorsement.
James P. O'Shaughnessy is a noted investment thinker and fund manager, and the strategy I based on his writings strongly recommends PC Connection. The strategy likes the company's market cap ($622 million), earnings per share that have increased in each of the last five years, and its very strong price-to-sales ratio (which indicates the stock is well priced).
Among those companies that pass these criteria, the strategy picks the top 50 based on relative strength, which is a measure of how well a stock has performed in the past year relative to the market. PC Connection makes it into this elite group.
My O'Shaughnessy-based strategy is not alone in liking PC Connection. My Peter Lynch strategy is also a fan. This strategy focuses on the on the PEG ratio, which is price-to-earnings relative to growth, and measures how much the investor is paying for growth given today's stock price. Up to 1.0 is allowed, and PC Connection's PEG is only 0.53, which is excellent.
PC Connection is a mid-sized company with over three decades' experience, a proven niche and a strong track record. If you want to invest in a company a bit under the radar screen of many investors, this is a good choice.