Q: Softchoice has been somewhat rangebound over the past year. I bought near the bottom of that range in mid-December with the expectation of selling. Now I'm wondering if I should hold. The P/E is modest and the div is not bad but I don't know much about what is happening under the hood. Best guess - hold or sell?
5i Research Answer:
SFTC has been relatively flat over the last year and part fo the reason could be attributed to lower hardware demand that is forecasted to rebound in 2024. Despite declining revenues in 2023, SMTC's gross profit margins have improved which is a good sign. Growth forecast for the next two years for revenue is quite marginal for revenue over the next two years while EPS growth is similar. We don't see SFTC having a huge growth profile going forward but the stock could still perform well in 2024. We think there are other more intriguing options.