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6 Reasons Why FTI Consulting (FCN) is an Attractive Pick

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A prudent investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.

FTI Consulting, Inc. (FCN - Free Report) has performed extremely well in the past six months and has the potential to sustain the momentum in the near term. Consequently, if you haven’t taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.

What Makes FTI Consulting a Solid Pick?

An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse over the past six months. Shares of FTI Consulting have returned a massive 38.8%, which compares favorably with the industry’s gain of 8.3%.

 

Solid Rank & VGM Score: FTI Consulting currently carries a Zacks Rank #1 (Strong Buy) and has a Value Growth Momentum Score (VGM Score) of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the last 60 days, the Zacks Consensus Estimate for current quarter earnings increased 18.2% to 65 cents per share. Estimates for 2018 increased 13.9% to $2.53 per share.

Positive Earnings Surprise History: FTI Consulting has an impressive earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters, delivering an average positive earnings surprise of 6.1%.

FTI Consulting, Inc. Price and EPS Surprise

 

FTI Consulting, Inc. Price and EPS Surprise | FTI Consulting, Inc. Quote

Strong Growth Prospects: The Zacks Consensus Estimate for 2018 earnings is currently pegged at $2.53, indicating year-over-year growth of 9.1%. Moreover, earnings are expected to register 9.4% growth in 2019.

Growth Drivers: Let’s delve deeper into some other factors to have a better idea of the performance of this global business advisory firm and consulting services provider.

International Presence

We appreciate FTI Consulting’s potential to club diverse issues like damage assessment, accounting, economics, statistics, finance and industry under a single platform. This makes it an excellent partner for global clients dealing with international arbitration issues. Further, FTI Consulting continues to pursue opportunities in areas such as business transformation services, transaction advisory business, retail, construction, data and analytics, cyber business, information governance and international arbitration.

This, in turn, leads to continued revenue growth. We believe FTI Consulting’s international expansion remains strong and is likely to continue in the future as well.

Structural Changes

In order to stay ahead in the rapidly evolving and competitive global markets, structural change has become a necessity as management teams look to fend off rivals, protect intellectual property rights and transform businesses via M&A, divestiture and other restructuring activities. These developments call for FTI Consulting’s specialized skill set and consequently boost its revenues.

Shareholder Friendly Moves

On Dec 1, 2017, FTI Consulting’s board of directors approved an additional $100 million for share repurchases. With the hike, the aggregate share repurchase authorization totaled $300 million. As of Dec 31, 2017, the company had approximately $113.3 million available for stock repurchases under its $300 million share repurchase authorization. In 2017, the company returned $168 million to shareholders through share repurchases at an average price of $35.94 per share.

Such shareholder friendly moves indicate the company’s commitment to create value for shareholders and underline its confidence in its business.

Solid Quarterly Results

FTI Consulting reported solid fourth-quarter 2017 results with healthy year-over-year increase in earnings and revenues. Adjusted earnings were 78 cents per share compared with 24 cents in the year-earlier quarter. The bottom line comfortably surpassed the Zacks Consensus Estimate of 50 cents. Total quarterly revenues of $467.7 million was up 5.8% from the year-ago quarter. The figure outpaced the Zacks Consensus Estimate by $15.7 million.

The company is slated to release first-quarter 2018 results on Apr 26, 2018. The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $456.01 million, indicating year-over-year growth of 2.2%. Earnings are estimated to soar 91.2% from the year-ago quarter to 65 cents.

Other Stocks to Consider

Some other top-ranked stocks in the broader Business Services sector include Automatic Data Processing (ADP - Free Report) , NV5 Global (NVEE - Free Report) and CoreLogic . While NV5 Global sports a Zacks Rank #1, Automatic Data Processing and CoreLogic carry a Zacks Rank #2.

The long-term expected earnings per share growth rate for Automatic Data Processing, NV5 Global and CoreLogic are 11%, 20% and 11%, respectively.

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