The Dicker Data Ltd (ASX: DDR) share price has rewarded shareholders handsomely over the past month.
Many investors would consider it a huge win to amass a return of more than 25% over the course of a whole year. Well, shares in the IT wholesale distribution company have delivered this impressive gain in one month. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has inched up 0.63% — the comparison is chalk and cheese.
In light of the remarkable run, we take a peek at what has been happening at Dicker Data.
What's been driving the Dicker Data share price surge?
In the entire last month, only one price-sensitive announcement has left the doors of Dicker Data. As such, we can deduce this announcement likely had a lot to do with Dicker Data's share price. That one lonely announcement was the company's third-quarter trading update.
On the day of release, investors voted with their cash, bidding up the company's shares. In fact, the share price rose nearly 14% on the unaudited results. Despite experiencing impacts from supply constraints, revenue and earnings increased by double-digit figures when compared to the previous year.
Specifically, year-to-date revenue surged 16.1% year on year to $1.7 billion. Meanwhile, the company's profit before income tax jumped 26% year on year to $76.6 million.
Those impressive results have brought the Dicker Data share price to within reach of its 52-week high. In August, the company reached its peak of $16.60 before being decimated soon after. The market reacted with fierce selling after finding out the company's chair and CEO David Dicker had sold a chunk of shares.
The company's shares continued on a downwards trend until turning the corner in early October. Since then, the Dicker Data share price has regained a phenomenal 31.2%.
Current valuation
Following the outstanding performance over the past month, the company now holds a market capitalisation of $2.7 billion. Compared to other companies in the ASX 200, that wedges Dicker Data between Event Hospitality and Entertainment Ltd (ASX: EVT) and BWP Trust (ASX: BWP).
Finally, at its current price, Dicker Data is trading on a price-to-earnings (P/E) ratio of about 44 times. For context, the Australian electronic industry average is 17.4 times.
