Demand for business information services witnessed a near- to mid-term pressure with the coronavirus pandemic hitting the economy hard and slowing down manufacturing and non-manufacturing activities across the globe.
However, with people gradually adapting to the new normal, the industry now stands on a solid footing. The coronavirus pandemic has resulted in many-fold increase in demand for specific solutions that ensure risk mitigation, cost reduction and productivity improvement. This, in turn, has increased business opportunities for industry players. These companies are now modifying their business strategies to offer more customer-centric solutions.
Rising technology adoption is enabling industry participants offer digitally-transformed, personalized and value-added services. Automation in assembling and use of big data in enhancing business information should drive competitive advantage, increase innovation, improve speed-to-market and drive performance within the industry. Companies are moving from conventional data solutions to technical and domain-specific expertise, data analytics solutions, financial consultancy, and operational consultancy services.
Companies that have either completed or progressed significantly with their digital transformation journeys are positioned to recover quickly post the pandemic. This is because digital transformation significantly improves operational efficiency, accelerates time to market, and boosts a firm’s ability to quickly and efficiently meet customer expectations.
3 Business – Information Services Stocks to Bet On
Adding stocks from the industry looks like a smart move to enhance your portfolio as the pandemic rages on. The buoyancy in the industry is further confirmed by its
Zacks Industry Rank #35, which places it in the top 14% of more than 250 Zacks industries. Additionally, the industry has gained 9.7% in the past six months.
We have zeroed in on three promising stocks, which have a Zacks Rank #2 (Buy), witnessed upward estimate revisions in the past 90 days and had an impressive run on the bourse in the past six months. These stocks also have a solid four-quarter average earnings surprise history.
You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Let’s have a look at the three picks:
S&P Global Inc. ( SPGI Quick Quote SPGI - Free Report) : This New York-based company provides ratings, benchmarks, analytics, and data to the capital and commodity markets sports worldwide.
The company’s top line has been doing well on the back of solid segmental performance and the bottom line has been aided by revenue growth, benefits of productivity initiatives and reduced expenses from COVID-19-related management actions.
Additionally, continued product launches and investment in growth initiatives, implementation of robotic process automation projects, consolidation of data centers and migration to cloud, successful operations from remote locations, cost-reduction measures such as hiring freeze, reduction in travel, advertising and promotion expenses, and lowered use of outside professional services have been aiding the company’s growth amid the pandemic.
Further, the company has raised its full-year adjusted EPS guidance to the range of $10.75-$10.95 from the prior guidance of $9.95-$10.15. The current Zacks Consensus Estimate of $11.10 lies above the raised guidance.
The Zacks Consensus Estimate for the current year EPS has moved up 10.2% in the past 90 days. The company’s expected earnings growth rate for the current year is 16.5%. The company has a trailing four-quarter earnings surprise of 12.4%, on average. The stock has rallied 42.5% in the past six months.
Black Knight, Inc. ( BKI Quick Quote BKI - Free Report) : This Florida-based company provides integrated software, data, and analytics solutions in the United States.
Despite COVID-19 induced market uncertainty, the company has been enjoying increased revenues from new and existing clients, higher refinance origination volumes, solid sales execution and revenues from an acquired business. The recently announced acquisition of Optimal Blue is expected to complement and enhance the company’s data and analytics capabilities.
The company has raised the lower end of its revenue and adjusted EBITDA guidance for 2020. Revenues are now anticipated between $1.17-$1.184 billion compared with the prior guidance of $1.164-$1.184 billion. Adjusted EPS was raised to the range of $1.94 to $1.99 compared with the prior guidance of $1.90-$1.97. Adjusted EBITDA is now expected between $572 million and $583 million compared with the prior guidance of $568-$583 million.
The Zacks Consensus Estimate for the current year EPS has moved up 2.6% in the past 90 days. The company has a trailing four-quarter earnings surprise of 8.5%, on average. The stock has rallied 41.9% in the past six months.
TransUnion ( TRU Quick Quote TRU - Free Report) : This Illinois-based company provides risk and information solutions.
Its business model ensures highly recurring and diversified revenue streams. The company continues to follow the work-from-home model, and is trying to be disciplined in managing investment priorities and cost structure in response to the COVID-19 pandemic. The recent launch of the CreditVision Acute Relief Suite, a collection of tools for lenders and insurers to evaluate customers affected by the coronavirus mayhem, is an appreciative move in this situation. The latest acquisition of Signal should boost TransUnion’s marketing abilities through people-based identity-enabled marketing solutions. The company continues to invest in its Global Solutions and Global Operations organizations and in its accelerated technology initiative, Project Rise. TransUnion is optimistic about its aforementioned investments. The latest appointment of Billy Bosworth in the board of directors should boost TransUnion’s business operations.
The Zacks Consensus Estimate for current year EPS has moved up 14.2% in the past 90 days. The company’s expected earnings growth rate for the current year is 3.9%. The company has a trailing four-quarter earnings surprise of 13.7%, on average. The stock has rallied 35.1% in the past six months.
The chart below shows the price performance of the aforementioned stocks compared with the industry, the Zacks S&P 500 composite and the broader Zacks Business Services sector in the past six months.
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