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Companies You’ve Never Heard Of: Tech Data (TECD)

Companies You've Never Heard Of: Tech Data (TECD)
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With its purchase of Avnet, Inc’s (NYSE:AVT) Technology Solutions division last year, Tech Data Corp (NASDAQ:TECD) became the largest IT distributor in the world.

Fiscal 2017 revenue should be around $36 billion, easily enough to push Tech Data into the Fortune 100. That’s $36 billion worth of computers, smartphones, tablets and servers that go from manufacturers to customers with Tech Data’s help.

Investors loved the Avent purchase, driving TECD stock up 22% in a single day on the news. And there’s reason to be optimistic going forward as well. IT distribution is a very difficult business: companies like Tech Data and Avnet usually make just a penny or two on each dollar in sales.

It’s why “bigger is better” is generally the rule in the space, and why TECD stock benefited so much from its expansion. But with technology only getting more important, and more complicated, there’s little reason to think TECD can’t continue to grow — both in terms of sales and profits.

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