A wise investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.
Here we focus on Broadridge Financial Solutions, Inc. (BR - Free Report) , which is an outsourcing stock that performed extremely well over the past year and has the potential to carry the momentum forward. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
Why an Attractive Pick?
Share Price Appreciation: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse over the past year. Broadridge returned a whopping 74.4%, which compared favorably with the industry’s 31.4% growth.
Solid Rank & VGM Score: Broadridge has a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities for investors. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Three estimates for fiscal 2019 moved north over the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for fiscal 2019 climbed 3.1%.
Positive Earnings Surprise History: Broadridge has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 23.4%.
Solid Growth Prospects: The Zacks Consensus Estimate for fiscal 2019 earnings of $4.64 reflects year-over-year growth of 10.7%. Earnings are expected to grow 8.2% in fiscal 2020. The projected long-term earnings per share growth rate for Broadridge stands at 10%.
Key Catalysts: Broadridge’s recurring fee revenues have witnessed CAGR of 14.3% in the last three years (2016-2018) and constitute the bulk of its top line. It currently has a large recurring revenue backlog of around $300 million, which provides good visibility on its organic revenues in the near to mid-term.
The company’s Global Technology and Operations business looks well poised as its pipeline includes large deals. The company’s capital market business should grow as markets consistently globalize and regulatory changes continue to take place. Its investment management business is benefiting from increase in scrutiny on money movements. Also, growing demand for transparency in corporate governance should drive the governance business.
Broadridge Financial Solutions, Inc. Revenue (TTM)
Broadridge has been improving upon its presence in EMEA and APAC with growing adoption of outsourcing. It is expanding with regional clients by offering market relevant solutions. Governance and Capital Markets franchises look strong on the back of growing breadth of products.
Increasing demand for technology solutions should help Broadridge gain significantly from its SaaS based offerings. Trends like growing demand for data and analytics, mutualization and digitization should drive sales. The company has ramped up investments in digital, AI, cloud and blockchain particularly via acquisitions.
Some other top-ranked stocks in the broader Business Services sector include CRA International (CRAI - Free Report) , FTI Consulting (FCN - Free Report) and NV5 Global (NVEE - Free Report) . While CRA International and FTI Consulting sport a Zacks Rank #1, NV5 Global carries a Zacks Rank of 2.
CRA International, FTI Consulting and NV5 Global have an impressive surprise history, with a positive earnings surprise of 38.6%, 58.3% and 12.7%, respectively.
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