Electronics distributor Electrocomponents (ECM) jumps 5.4% higher to 384p on the back of a bullish research note published today by investment bank Liberum.

Rahim Karim at Liberum kicked off the bank's coverage of the stock with a 'buy' call and a 420p price target.

Benefits from an ongoing cost rationalisation programme and structural opportunities in industrial and electronic markets are key to the Karim's bullish call.

Electrocomponents share price one year

Structural growth drivers include Electrocomponents' DesignSpark portal, a community of thousands of engineers worldwide which are provided with free software design tools and development resources.

Karim is also optimistic that Electrocomponents is well placed to take advantage of big picture trends including the Internet of Things and Big Data as they drive demand for its products.

Electrocomponents' appointment of Lindsley Ruth in late 2015 is also cited by Karim as a turning point. Shares in the Oxford-headquartered outfit have soared more than 50% since Ruth outlined a three-year restructuring programme in November 2015, though stock market performance at UK rival Premier Farnell was similar until the business was taken over by US rival Avnet (AVT:NYSE) over the summer.

Shares flagged Electrocomponents as cheap for no reason in August 2015 when the stock traded at 196p.

Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account. AJBell logo

Issue Date: 28 Oct 2016