If you’ve bought a new PC or other computer gear from a local retailer, chances are it got to you via Dicker Data (ASX:DDR) Ltd. Branding itself as Australia’s most trusted IT distributor, Dicker Data (ASX:DDR) has skyrocketed since the low of July 26, as its share price is up 28%, with more predicted to come.
The stellar growth of Dicker Data (ASX:DDR) is positive as it has managed to offset losses from other declining segments by diversifying its products and services.
This has protected the company somewhat from market volatility, as it now offers everything from software integration, project and server management, and networking among other services. Looking at the numbers, the company has recently reported its half-year earnings are up 15.40% while net profit after tax is up 9.40% compared to last year’s half-year results.
Tech is life
There is no question that, as a society, we are not only reliant on technology, but it also plays a big part in our everyday lives. Dicker Data recognises this and has been actively expanding its business with the recent acquisition of Hills Security and IT and Connect Security Products Ltd in New Zealand. No longer is it considered just a supplier of computers or new hard drives; it’s more diverse than that.
The technology sector has been the most bullish in the Australian market this year, and until recently, Dicker Data has lagged behind the sector. But they now have the foundations for the next growth stage and will outperform the market moving forward.
The share price has hit key resistance at around $10 and is showing short-term weakness.
While I don’t believe the resistance is significant, you must be mindful that the market and stocks have been subject to unpredictable volatility. While only time will tell what direction Dicker Data will take, I believe this is a stock to put on your watch list as an opportunity to take advantage of in the not-too-distant future.
Dale Gillham is the Chief Analyst at Wealth Within and the international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of the bestselling and award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores and online at www.wealthwithin.com.au