January 26, 2023

Bechtle is a rather safer investment in IT industry

Bechtle is a rather safer investment in IT industry

Obermatt’s Zoom Coffee Break stock investing chats always bring out new and interesting investment ideas. Last week, the guest investors decided on Bechtle: a German full service IT company. Being one of the largest computer software and hardware resellers through various owned brands, they also provide IT services.

Interestingly enough, Obermatt’s portfolios don’t have many IT companies on them. Their current rather sub par performance may not be a good indicator for the future, as IT is the fastest changing industry, with new inventions and habits replacing old ones in a blink of an eye. That being said, companies like Bechtle that base most of their profits on reselling IT products can be a safe bet. So let’s review the pros and cons as we see them.

PRO: The following three points speak for a buy:

  1. We base our buy decisions on the Obermatt Ranks and Bechtle’s Obermatt ranks are good. Value Rank set at 61 means that the stock is priced cheaper than more than half of its European competitors and especially good is their Price vs Revenues rank. The Safety rank is 76.
  2. Bechtle is a reseller, which means that they are well positioned on the innovation train of information technology.
  3. Large investments throughout the last couple of years, including in the field of employee training, mean that they are committed to continuous growth. They have also recently received an award for employee healthcare practices.

CONTRA: The following three points argue against it:

  1. Even though the company has lost a lot of its value during the past few years, we don’t think that past performance is relevant to future investors. Current financials are solid.
  2. Obermatt Growth Rank is quite low and this is due to the fact that the company’s Capital Growth Rank is only 24.
  3. Some investors may argue that buying IT stocks is risky due to the constant innovations that some companies fail to follow.

From our point of view, Bechtle is a safe investment, being a reseller in the IT industry. Hence, we decide we want to buy it for our Europe Value Wikifolio, managed by Obermatt’s CEO, Dr. Hermann J. Stern and his guest investors during the Coffee Break stock investing discussions, you may be a part of the stock chat for free.

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