A few weeks ago, one fund manager called Dicker Data Ltd (ASX: DDR) unfashionable… in a nice way.
"Dicker Data is not the high-flying glamorous tech company that continuously burns cash with the future 'promise' of one day being profitable," Totus Capital investment analyst Tim Warner posted on Livewire in May.
"It is quite the opposite… Since listing on the ASX in 2011, revenues have grown circa 7 times to $2 billion, and profits by circa 13 times."
Warner recommended back then, when the Dicker Data share price was $9.40, to buy the company's shares.
The stock price had dipped from a perception the company was the beneficiary of a one-off COVID-19 sugar hit. All of a sudden last year, many people had to work from home, and this saw demand for business tech soar.
There was also the perceived headwind of the global computer chip shortage.
"We believe this is creating an opportunity to buy a high quality business at an attractive price."
When The Motley Fool decided to examine this supposed divergence between share price and business quality, we went straight to the horse's mouth.
Dicker Data COO: COVID-19 boost will last for YEARS
Vladimir Mitnovetski is the chief operating officer at Dicker Data — the second-in-charge, in other words.
The coronavirus pandemic did have a material impact on Dicker Data's performance. Revenue jumped 18.2% for the 2020 financial year.
Despite revenue growth slowing to 6.4% for the 2021 financial year, Mitnovetski told The Motley Fool that tech adoption had only just started.
"If they think our industry was a short-term beneficiary [of COVID], that's not the case," he said.
"COVID had driven an acceleration of digital transformation… The next 5 years this is going to continue happening."
The message for holders of Dicker Data shares was clear, according to Mitnovetski.
"For everyone who's invested in Dicker Data, we're right in the heart of digital transformation, connecting all the people and companies bringing that technology with all the users," he said.
"Without being in the middle and connecting those together, this [transformation] would not be happening."
The worldwide chip shortage was real, Mitnovetski admitted. But relief is on its way.
"We've been in [the shortage] now since late last year. So we know how to operate, we know how to plan, and we know how to forecast," he said.
"Even if we're not getting enough to fulfil demand in the next 4 to 6 weeks, it's kind of still getting through in the next 3 to 4 months. I haven't seen anyone cancelling their orders."
Expansion plans
Totus Capital's Warner reminded everyone that Dicker Data was established in 1978, which was even before the first personal computer was in circulation.
So the Sydney company is experienced in dealing with new challenges and products. As such, Mitnovetski wasn't shy about revealing its current frontiers.
The first challenge is geographic expansion.
"We're definitely looking at ramping up our New Zealand operations," he told The Motley Fool.
"We've been growing 20%-plus in New Zealand year after year — that's going to continue happening."
The other goal is to diversify its technology catalogue.
"We're also looking at other adjacent industries, like operational technology, electrical market, physical security," he said.
"All the convergence of industries is giving us a new type of market that we can tap into."
Expansion would take place organically, but Mitnovetski did not rule out acquisitions.
"Acquisitions are always on our minds. If the opportunity comes along, absolutely."
The Dicker Data share price was down 0.09% on Thursday, finishing the day at $11.20. That's 4.7% up on the year.
