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.
WEX Inc. (WEX - 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 WEX have returned 41.2%, outperforming the 26% rally of the industry it belongs to.
Solid Rank: WEX has a Zacks Rank #1 (Strong Buy). Our research shows that stocks with a Zacks Rank #1 or #2 (Buy) offer attractive investment opportunities for investors. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Nine 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 2019 inched up 3.3%.
Positive Earnings Surprise History: WEX 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 2.12%.
Strong Growth Prospects: The Zacks Consensus Estimate for2019 earnings is currently pegged at $9.34, reflecting year-over-year growth of 12.8%. Moreover, earnings are expected to register 16% growth in 2020. The stock has long-term expected earnings per share growth rate of 15%.
Growth Drivers: WEX continues to grow organically driven by extensive network of fuel and service providers, transaction volume growth, product excellence, marketing capabilities and sales force productivity. Strategic acquisitions complement this growth by adding differentiation to products and service offerings and enhancing scalability, thus contributing to revenues.
WEX Inc. Revenue (TTM)
The recent acquisition of Discovery Benefits has boosted WEX’s position as a technology platform in the healthcare space and enhanced its employee benefits platform. It added $8 million to the company’s first quarter Health and Employee Benefit Solutions revenues (up 19% year over year) of $67.4 million.
The Noventis acquisition, completed recently, has strengthened WEX’s position as a corporate payments supplier. This acquisition was a driver of the 21% year-over-year growth of the company’s Travel and Corporate Solutions revenues of $81.6 million.
Other Stocks to Consider
Some other top-ranked stocks in the broader Zacks Business Services sector are Navigant Consulting (NCI - Free Report) , FLEETCOR Technologies (FLT - Free Report) and Global Payments (GPN - Free Report) . While Navigant sports a Zacks Rank #1, FLEETCOR and Global Payments carry a Zacks Rank #2.
Long-term expected EPS (three to five years) growth rate for Global Payments, FLEETCOR and Navigant is 17%, 16.5% and 13.5% respectively.
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