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Here's Why Investors Should Hold TransUnion (TRU) Stock Now

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A prudent investment decision involves buying stocks that have solid prospects and selling those that carry risks. At times, it is rational to hold certain stocks that have enough potential but are weighed down by tough market conditions.

Here we discuss about TransUnion (TRU - Free Report) , a stock that has surged 37.4% year to date, significantly outperforming the industry’s 19.4% growth. The long-term (three to five years) expected earnings per share growth rate for the company is 10%.

We believe that the company has the ability to sustain this momentum, courtesy of a large and expanding Big Data, and analytics market and acquisitions.

Expanding Addressable Market

TransUnion’s addressable market includes the Big Data and analytics market, which is expanding at a rapid pace. Numerous underlying trends such as creation of massive amounts of data, advances in technology and analytics that allow data to be processed more swiftly and efficiently, results in increased demand for these business insights across industries and geographies.

Research firm, IDC, projects that worldwide revenues for big data and business analytics (“BDA”) solutions will witness a compounded annual growth rate (“CAGR”) of 11.9% and reach $260 billion in 2022. In order to capitalize on the immense potential growth in this market, TransUnion has leveraged its next-generation technology to strengthen its analytics capabilities and further expanded its database.

TransUnion Revenue (TTM)

Acquisition: A Key Growth Strategy

TransUnion’s acquisition strategy has proved conducive to the company over the last five to six years. The strategy focuses on investment in unique and differentiated data assets, acquiring new capabilities for expanding in vertical markets and expanding international footprints.

So far in 2018, TransUnion has acquired Callcredit, iovation and Healthcare Payment Specialists. These buyouts are expected to help the company with new market entry and portfolio diversification moving ahead. Some notable buyouts by TransUnion in 2017 include DataLink services, FactorTrust and eBureau. These transactions are contributing significantly to the company’s top-line growth across all operating segments.

Zacks Rank & Key Picks

Currently, TransUnion carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Business Services sector include CRA International (CRAI - Free Report) , FTI Consulting (FCN - Free Report) and NV5 Global (NVEE - Free Report) . While CRA International and FTI Consulting sport a Zacks Rank #1 (Strong Buy), NV5 Global carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CRA International, FTI Consulting and NV5 Global have an impressive earnings surprise history, with an average four-quarter surprise of 38.6%, 58.3% and 12.7%, respectively.

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