"Could snap back to its old high of 30"
From the December 28 issue of Business Week.
CHS HOISTS ITS SAILS FOR
AMERICA
For CHS Electronics (HS), the world's third-largest distributor of
computer products, Europe is the main market, generating 75% of
sales. And as the euro currency draws nigh and as demand soars for
computers that are adjusted for use in the new millennium, CHS should
see robust growth. The company's remaining sales are 20% in Latin
America and 5% in Asia.
CHS is well positioned to take advantage of the coming demand for
post-2000 computers, says CEO Claudio Osorio. Also on his agenda,
however, is a plan to enter the U.S. Although the American computer
market is considered mature, a U.S. entry could boost CHS sales.
CHS, whose revenues, bolstered by acquisitions, have jumped from
$4.8 billion last year to $8 billion this year, serves some 120,000
resellers in 46 countries.
CHS may enter the U.S. through an acquisition, says Robert Damron of
Cleary Gull Reiland & McDevitt, a securities firm in Milwaukee, who
believes the company is eyeing two U.S. wholesalers of computer
products, each of which generates annual sales of about $5 billion. The
two main rivals of CHS, Ingram Micro and Tech Data are the dominant
sellers in the U.S.
Although either of the two could block a CHS entry into the U.S. by
launching a buyout bid for CHS, analysts don't see that a realistic
possibility. Osorio declines to comment on whether either has
approached him.
Meanwhile, the stock, now at 15, could snap back to its old high of 30,
says Damron, based just on its internal growth rate of 15% to 20%. He
figures CHS will earn $1.80 a share this year and $2.10 i n 1999, vs.
1997's $1.32.
BY GENE G. MARCIAL
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