ScanSource (NASDAQ:SCSC) Stock Falls 4.7% - Time to Sell?

Key Points

• ScanSource shares fell 4.7% to about $58.38 in light trading, despite remaining above the 200-day moving average of $47.58.
• Analyst views are mixed, but the consensus rating is “Hold” with an average price target of $51, below the current share price.
• The company recently exceeded earnings and revenue expectations, while insiders—including the CEO—sold approximately $5.5 million of stock over the past 90 days.

ScanSource, Inc. (NASDAQ:SCSC - Get Free Report)'s share price fell 4.7% during trading on Wednesday. The company traded as low as $58.37 and last traded at $58.3750. Approximately 53,573 shares changed hands during trading, a decline of 78% from the average daily volume of 238,721 shares. The stock had previously closed at $61.25.

Analysts Set New Price Targets

Several equities analysts have weighed in on the company. Wall Street Zen raised ScanSource from a "buy" rating to a "strong-buy" rating in a research report on Sunday. Weiss Ratings upgraded shares of ScanSource from a "hold (c+)" rating to a "buy (b-)" rating in a research note on Thursday, October 8th. Northcoast Research lowered ScanSource from a "buy" rating to a "neutral" rating in a research report on Monday, August 17th. Barclays increased their price objective on ScanSource from $43.00 to $51.00 and gave the company an "equal weight" rating in a research note on Monday, October 12th. Finally, Zacks Research lowered ScanSource from a "strong-buy" rating to a "hold" rating in a research report on Tuesday, October 20th. One research analyst has rated the stock with a Buy rating and three have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and an average target price of $51.00.

ScanSource Trading Down 4.5%

The company has a 50-day moving average price of $58.30 and a 200-day moving average price of $47.58. The firm has a market capitalization of $1.18 billion, a price-to-earnings ratio of 15.99, a PEG ratio of 0.83 and a beta of 1.25. The company has a debt-to-equity ratio of 0.11, a quick ratio of 1.15 and a current ratio of 1.76.

ScanSource (NASDAQ:SCSC - Get Free Report) last issued its earnings results on Thursday, August 20th. The industrial products company reported $1.46 earnings per share for the quarter, topping the consensus estimate of $1.14 by $0.32. The business had revenue of $953.11 million for the quarter, compared to analyst estimates of $814.35 million. ScanSource had a return on equity of 10.10% and a net margin of 2.44%. The business's quarterly revenue was up 17.3% on a year-over-year basis. During the same quarter last year, the company earned $1.02 EPS. As a group, research analysts forecast that ScanSource, Inc. will post 4.90 EPS for the current fiscal year.

Insider Activity at ScanSource

In other news, Director Charles Mathis sold 3,000 shares of the business's stock in a transaction dated Friday, September 11th. The stock was sold at an average price of $58.00, for a total value of $174,000.00. Following the completion of the sale, the director directly owned 25,027 shares of the company's stock, valued at approximately $1,451,566. The trade was a 10.70% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CEO Michael L. Baur sold 57,359 shares of the company's stock in a transaction dated Friday, September 11th. The shares were sold at an average price of $58.04, for a total value of $3,329,116.36. Following the completion of the sale, the chief executive officer directly owned 200,698 shares of the company's stock, valued at approximately $11,648,511.92. This trade represents a 22.23% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 95,632 shares of company stock valued at $5,484,582 in the last ninety days. 3.18% of the stock is currently owned by insiders.

Hedge Funds Weigh In On ScanSource

Hedge funds have recently modified their holdings of the business. Freestone Grove Partners LP purchased a new stake in ScanSource in the 2nd quarter valued at $119,000. Signaturefd LLC grew its position in ScanSource by 128.1% during the 3rd quarter. Signaturefd LLC now owns 2,108 shares of the industrial products company's stock worth $124,000 after purchasing an additional 1,184 shares during the last quarter. Mitsubishi UFJ Asset Management Co. Ltd. acquired a new position in ScanSource in the second quarter valued at $134,000. RHS Financial LLC acquired a new position in ScanSource in the third quarter valued at $210,000. Finally, HighTower Advisors LLC acquired a new position in ScanSource in the second quarter valued at $246,000. 97.91% of the stock is currently owned by hedge funds and other institutional investors.

ScanSource Company Profile

ScanSource, Inc NASDAQ: SCSC is a technology distributor that connects manufacturers of business technology products with value-added resellers, systems integrators and other channel partners. The company provides products, services and expertise intended to help partners design, deploy and support technology solutions for business customers.

ScanSource's offerings include point-of-sale and payment technology, barcode scanners, mobile computing devices, networking equipment, cybersecurity products, communications systems and cloud-based services.

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