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5 Business Services Stocks That Could Keep Winning Big in 2019
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The service sector offers staffing, consulting, advertising and marketing, outsourcing, technology services, financial transaction and waste removal services to name a few. Its widely diversified nature makes the sector’s performance a function of the health of the broader economy. After all, it accounts for nearly 80% of the economy.
Trump’s policies have aided the economy through 2018. Government spending, especially in defense, and the tax reform have helped it gain traction, to the extent that the Federal Reserve raised its key interest rate four times this year.
Lower tax rates increased corporate spending significantly and companies poured tax savings into growth initiatives. This accelerated manufacturing and non-manufacturing activities, increased wages and reduced unemployment. Consumer purchasing power remained in great shape.
A healthy manufacturing and non-manufacturing scenario kept the service industry in good shape through 2018.
Number Crunching
ISM reported that its service index stood at 60.7% for the month of November, surpassing the consensus estimate of 59.2% and October reading of 60.3%, and growing for the 106th consecutive month.
The November reading was the second highest in 13 years, only behind 61.6% in September. Notably, any reading above 50% indicates expansion of the services sector and a reading of above 55% reflects outstanding performance by the services sector.
The ISM manufacturing index rebounded in November defying tariffs and labor shortages. It came in at 59.3%, higher than 57.7% registered in October and above the consensus estimate of 57.7%. The temporary trade truce between the United States and China should act as a tailwind for the sector.
2019 Expectations
The Fed’s continuous efforts to withdraw support from the economy reflects nothing but its continued strength. The drivers in 2018 are expected to remain impactful in 2019 as well.
The services sector should be in good shape driven by inherent economic stability. Strength in finance & insurance and e-commerce, developments in the digital services and positive contribution from a firm labor market should boost the sector.
5 Services Stocks for Your New Year Portfolio
The U.S. economy should continue to benefit from government, corporate and consumer spending in 2019. Additionally, four interest rate hikes this year by the Fed, indicating inherent economic stability, should boost investors’ confidence.
Thus, adding business services stocks looks like a smart move to enhance your portfolio in the near future.
With the help of the Zacks Stock Screener, we have zeroed in on five promising stocks from the staffing space, which have a favorable Zacks Rank #1 (Strong Buy) or 2 (Buy). These stocks also have a solid expected earnings growth rate for 2019 and have witnessed upward earnings estimate revisions in the past 60 days.
Insperity, Inc. (NSP - Free Report) : The stock of this Zacks #1 Ranked human resources (HR) and business solutions provider has gained 59.7% year to date against 7.6% decline of the Zacks S&P 500 composite. Currently, the company has a market capitalization of $3.7 billion.
The company’s expected earnings growth rate for 2019 is 15%. The Zacks Consensus Estimate for 2019 has increased 7.8% in the past 60 days.
General Finance Corporation :The stock of thisspecialty rental services company has gained 42.9% year to date. Currently, the company carries a Zacks Rank #1 and has a market capitalization of $273.5 million.
The company’s expected earnings growth rate for fiscal 2019 is 70.3%. The Zacks Consensus Estimate for 2019 has increased 34.1% in the past 60 days.
EVERTEC, Inc. (EVTC - Free Report) :The stock of this transaction processing company has surged 104.8% year to date. Currently, the company carries a Zacks Rank #2 and has a market capitalization of $1.9 billion.
The company’s expected earnings growth rate for 2019 is 7.7%. The Zacks Consensus Estimate for 2019 has increased 3.1% in the past 60 days.
SPS Commerce, Inc. (SPSC - Free Report) :The stock of this cloud-based supply chain management solutions provider has gained 65.9% year to date. Currently, the company carries a Zacks Rank #2 and has a market capitalization of $1.4 billion.
The company’s expected earnings growth rate for 2019 is 10.3%. The Zacks Consensus Estimate for 2019 has increased 1.5% in the past 60 days.
Exponent, Inc. (EXPO - Free Report) : The stock of this science and engineering consulting company has surged 37.3% year to date. Currently, the company carries a Zacks Rank #2 and has a market capitalization of $2.4 billion.
The company’s expected earnings growth rate for 2019 is 6.4%. The Zacks Consensus Estimate for 2019 has increased 1.4% in the past 60 days.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
Image: Bigstock
5 Business Services Stocks That Could Keep Winning Big in 2019
The service sector offers staffing, consulting, advertising and marketing, outsourcing, technology services, financial transaction and waste removal services to name a few. Its widely diversified nature makes the sector’s performance a function of the health of the broader economy. After all, it accounts for nearly 80% of the economy.
Trump’s policies have aided the economy through 2018. Government spending, especially in defense, and the tax reform have helped it gain traction, to the extent that the Federal Reserve raised its key interest rate four times this year.
Lower tax rates increased corporate spending significantly and companies poured tax savings into growth initiatives. This accelerated manufacturing and non-manufacturing activities, increased wages and reduced unemployment. Consumer purchasing power remained in great shape.
A healthy manufacturing and non-manufacturing scenario kept the service industry in good shape through 2018.
Number Crunching
ISM reported that its service index stood at 60.7% for the month of November, surpassing the consensus estimate of 59.2% and October reading of 60.3%, and growing for the 106th consecutive month.
The November reading was the second highest in 13 years, only behind 61.6% in September. Notably, any reading above 50% indicates expansion of the services sector and a reading of above 55% reflects outstanding performance by the services sector.
The ISM manufacturing index rebounded in November defying tariffs and labor shortages. It came in at 59.3%, higher than 57.7% registered in October and above the consensus estimate of 57.7%. The temporary trade truce between the United States and China should act as a tailwind for the sector.
2019 Expectations
The Fed’s continuous efforts to withdraw support from the economy reflects nothing but its continued strength. The drivers in 2018 are expected to remain impactful in 2019 as well.
The services sector should be in good shape driven by inherent economic stability. Strength in finance & insurance and e-commerce, developments in the digital services and positive contribution from a firm labor market should boost the sector.
5 Services Stocks for Your New Year Portfolio
The U.S. economy should continue to benefit from government, corporate and consumer spending in 2019. Additionally, four interest rate hikes this year by the Fed, indicating inherent economic stability, should boost investors’ confidence.
Thus, adding business services stocks looks like a smart move to enhance your portfolio in the near future.
With the help of the Zacks Stock Screener, we have zeroed in on five promising stocks from the staffing space, which have a favorable Zacks Rank #1 (Strong Buy) or 2 (Buy). These stocks also have a solid expected earnings growth rate for 2019 and have witnessed upward earnings estimate revisions in the past 60 days.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Insperity, Inc. (NSP - Free Report) : The stock of this Zacks #1 Ranked human resources (HR) and business solutions provider has gained 59.7% year to date against 7.6% decline of the Zacks S&P 500 composite. Currently, the company has a market capitalization of $3.7 billion.
The company’s expected earnings growth rate for 2019 is 15%. The Zacks Consensus Estimate for 2019 has increased 7.8% in the past 60 days.
General Finance Corporation :The stock of thisspecialty rental services company has gained 42.9% year to date. Currently, the company carries a Zacks Rank #1 and has a market capitalization of $273.5 million.
The company’s expected earnings growth rate for fiscal 2019 is 70.3%. The Zacks Consensus Estimate for 2019 has increased 34.1% in the past 60 days.
EVERTEC, Inc. (EVTC - Free Report) :The stock of this transaction processing company has surged 104.8% year to date. Currently, the company carries a Zacks Rank #2 and has a market capitalization of $1.9 billion.
The company’s expected earnings growth rate for 2019 is 7.7%. The Zacks Consensus Estimate for 2019 has increased 3.1% in the past 60 days.
SPS Commerce, Inc. (SPSC - Free Report) :The stock of this cloud-based supply chain management solutions provider has gained 65.9% year to date. Currently, the company carries a Zacks Rank #2 and has a market capitalization of $1.4 billion.
The company’s expected earnings growth rate for 2019 is 10.3%. The Zacks Consensus Estimate for 2019 has increased 1.5% in the past 60 days.
Exponent, Inc. (EXPO - Free Report) : The stock of this science and engineering consulting company has surged 37.3% year to date. Currently, the company carries a Zacks Rank #2 and has a market capitalization of $2.4 billion.
The company’s expected earnings growth rate for 2019 is 6.4%. The Zacks Consensus Estimate for 2019 has increased 1.4% in the past 60 days.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
These 10 are painstakingly handpicked from over 4,000 companies covered by the Zacks Rank. They are our primary picks poised to outperform in the year ahead. Be among the first to see the new Zacks Top 10 Stocks >>