A wise investment decision involves buying well-performing stocks at the right time and selling those that are at risk. A rise in share price and strong fundamentals indicate a stock’s bullish run.
Omnicom Group Inc. OMC has performed well in the past six months and has the potential to sustain the momentum going forward. Therefore, if you have not taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes Omnicom 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 in the past six months. Shares of Omnicom have gained 11.4% against 8.5% decline of the industry it belongs to.
Solid Zacks Rank: Omnicom currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Positive Earnings Surprise History: Omnicom has an impressive earnings surprise history. The company outpaced the consensus mark in each of the trailing four quarters, delivering average positive earnings surprise of 3.9%.
Strong Growth Prospects: The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.66, indicating year-over-year growth of 7.1%. Moreover, earnings are expected to register 10.2% growth in 2018 and 0.9% growth in 2019. The stock has an expected long-term (three to five years) earnings per share growth rate of 6.9%.
Driving Factors: Omnicom’s continuous focus on its internal development initiatives is appreciable. The company has been making internal investments in its agencies, back office operations as well as in data, analytics and precision marketing, to increase efficiency. We expect Omnicom to witness higher revenues on the back of organic growth. Notably, in first nine months of 2018, organic growth resulted in a 2.5% increase in total revenues.
Omnicom has been enhancing its digital transformation, data-driven solution and customer-centric services suite with the help of acquisitions, partnerships and investments. To this end, the company’s notable acquisitions in 2018 include the media and marketing performance business of United Digital Group (in Germany) in October 2018; majority stake in Levo — a leading marketing services and technology business with offices across Australia and New Zealand in August 2018; and Credera — a management and IT consulting firm with offices in Dallas, Houston and Denver in July 2018. Buyout of Brain Group — a digitally-focused agency for media planning, marketing and transformation consulting and content creation is another positive.
As far as partnership is concerned, Omnicom Media Group partnered with IRI in April 2018 wherein IRI will serve as a preferred consumer packaged goods (CPG) data provider for Omnicom Media Group’s data and analytics division, Annalect.
The company’s continuous investments in its data and analytics platform are evident from the launch of Omni — a people-based precision marketing and insight platform. The platform is expected to identify and define personalized consumer experiences at scale across creative, media, CRM as well as other Omnicom practice areas.
Other Stocks to Consider
Other top-ranked stocks in the broader Zacks Business Services sector include Booz Allen Hamilton BAH, Republic Services RSG and Waste Connections WCN, each carrying a Zacks Rank #2. Long-term expected EPS (three to five years) growth rate for Booz Allen Hamilton, Republic Services and Waste Connections is 14.4%, 10.7% and 11.7%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Omnicom Group Inc. (OMC) : Free Stock Analysis Report
Waste Connections, Inc. (WCN) : Free Stock Analysis Report
To read this article on Zacks.com click here.