Good news everyone, the stock market didn’t crash Thursday. Even better, it rebounded a bit, rallying off Wednesday’s lows. So instead of ducking underneath the desk expecting a thousand aftershocks, it’s time to really dig in and look for stocks to buy for the next leg higher. Here I found one I’m naming my Bull of the Day, Kelly Services (KELYA - Free Report) .
Kelly Services, Inc., together with its subsidiaries, provides workforce solutions to various industries worldwide. The company operates through seven segments: Americas Commercial; Americas Professional and Technical; Europe, Middle East and Africa Commercial; Europe, Middle East and Africa Professional and Technical; Asia Pacific Commercial; Asia Pacific Professional and Technical; and Outsourcing and Consulting Group.
Kelly is topping our ranks as a Zacks Rank #1 (Strong Buy) right now because of recent earnings estimate revisions coming from analysts. Bullish revisions to current year, next year and current quarter estimates have been made over the last week. The increased EPS estimates have pushed our Zacks Consensus Estimates for the current quarter up from 15 cents to 23 cents. Our current year numbers have gone from $1.52 to $1.72, while next year’s consensus has shifted from $1.65 to $1.87.
The stock is in an industry that ranks in the Top 21% of our Zacks Industry Rank. This year, the staffing industry is up 2.2% while shares of Kelly Services are up 5%. Most of this relative outperformance has happened since mid-April. KELYA shares have rallied 17.5% off the mid-April lows while the rest of the industry is up 1.6% over that same time period.
Shortly after those mid-April lows KELYA broke through a downward trend channel, leapfrogging its 50-day moving average and re-establishing a bullish trend. The move stalled shy of $23 in late April, then retreated to the 50-day where buyers supported it four days in a row. Since then it’s been rocketing higher, putting in new 52-week highs over $24. The stock is a little overbought with the Commodity Channel Index coming in at 190. It’s encouraging to see the breakout from previous highs last seen in December. I expect positive momentum to continue with the Chaikin Money Flow confirming the bullish trend in the short term.
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