Action tipped by Investors Chronicle

Stable margins

Action Computer Supplies is being tipped as good value by the Investors Chronicle. Action said that there's no clear trend in its computer distribution business and some customers are cutting back while others are expanding. Margins are stable at 14 per cent, despite this year's roller coaster of IT pricing. Action grew its customer base by acquiring resellers SHL Technology Solutions and Fraser Associates, and the subsequent reorganisation entailed a £1 million hit, which was sufficiently well-flagged, the Chronicle said. Gearing levels deteriorated with the goodwill write-off but Warburg Dillon rates the shares positively at 11 times prospective earnings. ®

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