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Shares of FLEETCOR Technologies, Inc. scaled a new 52-week high of $291.79 during the trading session on Jul 05, before closing a tad lower at $291.77.
The company’s shares have charted a solid trajectory in recent times, appreciating over 57.1% year to date, ahead of the industry's rally of 39.4% and 18% rise of the Zacks S&P 500 composite.
Notably, FLEETCOR has witnessed an 43.7% rise in share price since it posted strong first-quarter 2019 results.
Let’s find out what’s supporting the rally.
Strategic Acquisitions
FLEETCOR has been continuously acquiring and investing in companies both in the United States as well as internationally to expand customer base, headcount and operations and diversify its service offerings across industries.
Since 2002, the company has acquired more than 75 companies and commercial account portfolios. In first-quarter 2019, FLEETCOR acquired Nvoicepay, which is expected to expand its corporate payments business with a full disbursement accounts payable cloud platform.
Acquisitions have been contributing significantly to FLEETCOR’s top line. In 2018, the company witnessed $97 million of additional revenues from the acquisitions completed in 2017.
Solid Cash Position
FLEETCOR’s strong balance sheet makes the stock attractive for investors. Effective management execution has helped FLEETCOR build cash, cash equivalents, and restricted cash of $1.40 billion as of Mar 31, 2019, with no long-term debt to clear off. It continues to use excess cash to aggressively buy back shares. In first-quarter 2019, FLEETCOR repurchased shares worth $3.32 million.
We believe that this strong cash position will not only help FLEETCOR continue with its shareholder-friendly activities but also pursue strategic acquisitions and investments for product development in the long run.
Upbeat 2019 Guidance
FLEETCOR raised its 2019 guidance for revenues and adjusted earnings while reaffirming the same for organic revenues (which is expected to register 9-11% growth), adjusted tax rate (anticipated between 23% and 24%) and interest expense (estimated around $160 million).
Total revenues are now anticipated in the range of $2.60-$2.66 billion compared with the previously guided range of $2.57-$2.63 billion. Adjusted earnings per share are now expected in the range of $11.47-$11.77 compared with the prior guided range of $11.40-$11.70 per share.
A few other top-ranked stocks in the broader Zacks Business Services sector are Broadridge (BR - Free Report) , Accenture (ACN - Free Report) and Automatic Data Processing (ADP - Free Report) , each carrying a Zacks Rank #2. Long-term expected EPS (three to five years) growth rate for Broadridge, Accenture and Automatic Data Processing is 10%, 10.3% and 13%, respectively.
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FLEETCOR Technologies Hits 52-Week High: What's Driving It?
Shares of FLEETCOR Technologies, Inc. scaled a new 52-week high of $291.79 during the trading session on Jul 05, before closing a tad lower at $291.77.
The company’s shares have charted a solid trajectory in recent times, appreciating over 57.1% year to date, ahead of the industry's rally of 39.4% and 18% rise of the Zacks S&P 500 composite.
Notably, FLEETCOR has witnessed an 43.7% rise in share price since it posted strong first-quarter 2019 results.
Let’s find out what’s supporting the rally.
Strategic Acquisitions
FLEETCOR has been continuously acquiring and investing in companies both in the United States as well as internationally to expand customer base, headcount and operations and diversify its service offerings across industries.
Since 2002, the company has acquired more than 75 companies and commercial account portfolios. In first-quarter 2019, FLEETCOR acquired Nvoicepay, which is expected to expand its corporate payments business with a full disbursement accounts payable cloud platform.
Acquisitions have been contributing significantly to FLEETCOR’s top line. In 2018, the company witnessed $97 million of additional revenues from the acquisitions completed in 2017.
Solid Cash Position
FLEETCOR’s strong balance sheet makes the stock attractive for investors. Effective management execution has helped FLEETCOR build cash, cash equivalents, and restricted cash of $1.40 billion as of Mar 31, 2019, with no long-term debt to clear off. It continues to use excess cash to aggressively buy back shares. In first-quarter 2019, FLEETCOR repurchased shares worth $3.32 million.
We believe that this strong cash position will not only help FLEETCOR continue with its shareholder-friendly activities but also pursue strategic acquisitions and investments for product development in the long run.
Upbeat 2019 Guidance
FLEETCOR raised its 2019 guidance for revenues and adjusted earnings while reaffirming the same for organic revenues (which is expected to register 9-11% growth), adjusted tax rate (anticipated between 23% and 24%) and interest expense (estimated around $160 million).
Total revenues are now anticipated in the range of $2.60-$2.66 billion compared with the previously guided range of $2.57-$2.63 billion. Adjusted earnings per share are now expected in the range of $11.47-$11.77 compared with the prior guided range of $11.40-$11.70 per share.
Zacks Rank & Other Key Picks
FLEETCOR currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few other top-ranked stocks in the broader Zacks Business Services sector are Broadridge (BR - Free Report) , Accenture (ACN - Free Report) and Automatic Data Processing (ADP - Free Report) , each carrying a Zacks Rank #2. Long-term expected EPS (three to five years) growth rate for Broadridge, Accenture and Automatic Data Processing is 10%, 10.3% and 13%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>