For some people, ScanSource ( SCSC ) may appear as though its merry days are over, while for others, they believe there is still some significant amount of value left in this leading specialty technology products distributor.

In my opinion, both could be right. I cannot dismiss the fact that ScanSource’s business, which spreads across two major segments, Barcode & Security and Communication & Services, could be boosted by various catalysts, such as increased demand for value added products, and the recent reorganization of its business units from geographical to product-based segments, among others.

On the other hand, the company’s revenues seem to be slowing, while margins remain low. Additionally, The company’s stock is trading at new all time highs in terms of P/E, which means, unless there is an improvement on earnings, then it is highly unlikely that the shares could rise any further.

Additionally, ScanSource’s shares are approaching its multi-year all time highs, achieved when it traded pretty cheap in terms of P/E.

Communications & Services on the other hand, focuses on communication technologies and services, which include voice and data products like voice recognition and call center management, and IP (internet protocol) communication applications among others.

However, note that ScanSource is by no means a vendor of any of the products used in executing the various processes mentioned, but rather a distributor. Its main strength lies in adding value to the products it distributes to resellers, by way of providing shipping services, marketing, education and training, among others. […]

Source seekingalpha.com