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.
Insperity, Inc. NSP has performed extremely well so far this year and has the potential to sustain the momentum in the near term. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add this staffing 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 year to date. Insperity’s shares have surged 64.5% year to date against the 12.1% decline of the industry it belongs to.
Solid Rank & VGM Score: Insperity currently sports a Zacks Rank #1 (Strong 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 or #2 (Buy) 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: Five estimates for the current year moved north over the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company. Over this period, the Zacks Consensus Estimate for the current year increased 5.4%.
Positive Earnings Surprise History: Insperity 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 18.4%.
Insperity, Inc. Price and EPS Surprise
Insperity, Inc. Price and EPS Surprise | Insperity, Inc. Quote
Strong Growth Prospects: The company’s Zacks Consensus Estimate for 2018 earnings of $3.71 reflects year-over-year growth of 51.4%. Moreover, earnings are expected to register 15% growth in 2019. The stock has long-term expected earnings per share growth rate of 18%.
Growth Drivers: The staffing industry is currently benefiting from a strong economy, leading to robust manufacturing and non-manufacturing activities, and higher corporate spending post the tax reform. The labor market has been witnessing record low unemployment levels and strong job additions since the beginning of the year.
This seems to be working in favor of Insperity, keeping its professional employer organization (PEO) solutions revenues in good shape. The company provides an array of human resources and business solutions through its PEO services, which includes Workforce Optimization and Workforce Synchronization solutions.
Insperity’s top-line growth is directly proportional to the rise in average number of worksite employees paid per month. Worksite employee growth is currently being driven by strength across sales, higher client retention and rise in net hiring of worksite employees by the company’s client base.
Financially, Insperity is in good shape, with $328.3 million in cash on hand and debt-to-capitalization ratio of 40.7%, as of Sep 30. The company believes in returning capital to shareholders through stock repurchases and dividends. Given a solid capital position, the company is expected to enhance shareholder’s value through share repurchases and dividends going forward.
Other Stocks to Consider
A few other top-ranked stocks in the Zacks Business Services sector are BG Staffing, Inc BGSF, Total System Services, Inc TSS and Robert Half International Inc RHI, each carrying a Zacks Rank #2.
The long-term expected EPS (three to five years) growth rate for BG Staffing, Total System Services and Robert Half is 20%, 14.2%, and 13.3%, respectively.
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Robert Half International Inc. (RHI) : Free Stock Analysis Report
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