A prudent 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 bull run.
FleetCor Technologies, Inc. (FLT - Free Report) is a Financial Transaction Services stock that has performed well so far this year and has the potential to sustain the momentum in the near term. So, if you haven’t taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes it an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse so far this year. Shares of FleetCor have returned 38.4%, outperforming the 26% rally of the industry it belongs to.
Solid Rank & VGM Score: FleetCor currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Seven estimates for 2019 moved north in the past 30 days versus no downward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for fiscal 2019 inched up 0.3%.
Positive Earnings Surprise History: FleetCor has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 1.71%.
Strong Growth Prospects: The Zacks Consensus Estimate for 2019 earnings is currently pegged at $11.65, reflecting year-over-year growth of 10.6%. Moreover, earnings are expected to register 15.4% growth in 2020. The stock has long-term expected earnings per share growth rate of 16.5%.
Growth Drivers: FLEETCOR’s top line continues to grow organically driven by increase in both volume and revenues per transaction in certain of its payment programs. In first-quarter 2019, organic revenue growth was 11%.
FleetCor Technologies, Inc. Revenue (TTM)
Acquisitions are contributing significantly to FLEETCOR’s top line. In 2018, the company witnessed $97 million of additional revenues from the acquisitions completed in 2017. The buyout of Nvoicepay, completed in first-quarter 2019, is expected to expand FLEETCOR’s corporate payments business with full disbursement accounts payable cloud platform.
FLEETCOR is a cash rich company with a strong balance sheet. As of Mar 31, 2019, the company had cash, cash equivalents and restricted cash of $1.4 billion, with no long-term debt to clear-off. This significant amount of cash provides FLEETCOR the flexibility to pursue strategic acquisitions and other related investments.
Cash rich companies not only guarantee protection but also reward shareholders from their deep cash balances. In first-quarter 2019, FLEETCOR repurchased shares worth $3.32 million. In 2018, 2017 and 2016, the company had repurchased shares worth $958.7 million, $402.4 million and $187.7 million, respectively.
Other Stocks to Consider
Some other top-ranked stocks in the broader Zacks Business Services sector are Navigant Consulting (NCI - Free Report) , WEX (WEX - Free Report) and Global Payments (GPN - Free Report) . While Navigant and WEX sport a Zacks Rank #1, Global Payments carries a Zacks Rank #2.
Long-term expected EPS (three to five years) growth rate for Global Payments, WEX and Navigant is 17%, 15% and 13.5% respectively.
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