Looking back at 2021, we see that it was the year of steady reopening of the economy, boosting both manufacturing and service activities, and of ramped-up vaccinations. While Omicron and Delta variant cases have raised concerns lately, manufacturing and service strength has acted as a tailwind for the
Business Services sector, which is a major beneficiary of the broader economy.
The sector is currently benefiting from growth in services pertaining to transportation, real estate, rental, leasing, warehousing, retail, wholesale, professional, technical, information, entertainment, finance, healthcare, education, accommodation and food.
2021 Trends That Should Prevail in 2022
With both manufacturing and service activities remaining in good shape, the demand for business services is expected to continue rising. Notably, the Institute for Supply Management has measured that Manufacturing PMI and Services PMI have clocked the 18
th consecutive month of expansion in November. The November Manufacturing PMI touched 61.1%, increasing 0.3 percentage points from the October reading of 60.8%. The November Services PMI registered an all-time high of 69.1%, increasing 2.4 percentage points from October’s reading of 66.7%.
Markedly, companies that have established successful work-from-home models, are focused on digital transformation, and have witnessed demand for their services going up or staying constant amid the pandemic-induced mayhem, have performed significantly well this year. With digitization and remote working becoming parts of the new normal, these companies are poised to continue their stellar performance in 2022 as well.
4 Business Services Stocks That Warrant a Look
Here we have picked four Business Services stocks with Zacks Rank #1 (Strong Buy) or #2 (Buy) that have gained more than 100% in 2021 and have witnessed upward estimate revisions in the past 60 days.
Avis Budget Group, Inc. ( CAR Quick Quote CAR - Free Report) : This car and truck rentals, car sharing, and ancillary services provider has seen its stock skyrocketing 501.6% year to date.
Avis Budget remains focused on structurally improving its business amid the pandemic through cost discipline and operational efficiencies. It is trying to improve and expand its relationships with key original equipment manufacturing partners besides maintaining disciplined fleet buy according to customer demand.
Further, Avis Budget continues to increase its use of technology and improve its offerings through connected cars, the Avis app and the Avis QuickPass offering to increase cost efficiency and customer satisfaction. Although COVID-19 remains as a major headwind, the improving travel demand trend bodes well for the company.
Avis Budget currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for its 2022 earnings has been revised more than 100% upward in 60 days’ time to $19.97. You can see
the complete list of today’s Zacks #1 Rank stocks here. Cross Country Healthcare , Inc. ( CCRN Quick Quote CCRN - Free Report) : This provider of talent management and other consulting services for healthcare clients is currently benefiting from the pandemic-induced increase in demand for healthcare staffing, investments in headcount and technology, and an increase in operational effectiveness.
Digital transformation and operational efficiency have been enabling the company to cater to the continuously increasing demand in specialties such as emergency room, operating room, labor, pediatrics, and delivery and medical-surgical services. The recent acquisition of Workforce Solutions Group expands Cross Country Healthcare’s go-to-market strategy and strengthens its foothold in the home care market.
The Zacks Consensus Estimate for the company’s 2022 earnings is currently pegged at $1.56, having moved 95% north over the past 60 days. This Zacks Rank #1 stock has appreciated a whopping 234.6%, so far this year.
Hudson Global, Inc. ( HSON Quick Quote HSON - Free Report) : This Zacks Rank #1 company offers talent solutions to multinational companies and government agencies under the Hudson RPO brand. The company’s new business pipeline remains strong and continues to grow.
The 2020 acquisition of Coit has significantly expanded Hudon RPO’s foothold in the technology space and contributed $625 million to the company’s third-quarter 2021 adjusted net income. The November 2021 acquisition of Karani is expected to improve Hudson RPO’s global delivery capability, and create new business opportunities in India and other new markets.
Shares of Hudson have rallied a massive 166.6% year to date. The Zacks Consensus Estimate for the 2022 bottom line has been revised from $1.25 to $2.22 in the past 60 days, calling for a year-on-year surge of more than 100%.
Gartner, Inc. ( IT Quick Quote IT - Free Report) : This research and advisory giant sports a Zacks Rank of 1, at present.
Operating in an industry with low barriers to entry, Gartner has an integrated research and consulting team designed to best serve clients’ needs. This enables it to have a competitive advantage over its rivals. Over time, Gartner’s research reports have become indispensable tools for diverse companies across different sectors, fortifying its leading position in the market.
The Zacks Consensus Estimate for 2022 EPS has been revised 7.6% upward in the past 60 days. The stock has surged 109.5% in the past year.