For Immediate Release
Chicago, IL – June 7, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Green Dot Corp. GDOT, Maximus MMS, Rollins ROL and Walmart WMT.
Here are highlights from Tuesday’s Analyst Blog:
ISM Services Index Remains Robust in May: 3 Top Picks
Economic activity in the non-manufacturing sector expanded in May as the Services PMI measured by the Institute for Supply Managementtouched 50.3%. This is the fifth straight month of expansion, with 11 service industries reporting growth.
The sector has grown in 35 of the last 36 months, contracting only in December 2022. Any reading above 50 indicates that the sector is expanding.
Green Dot Corp., Maximus and Rollins are among the stocks benefiting from a stable demand environment for services.
Business Activity & New Orders in the Pink, Employment Falls
The ISM Business Activity Index registered growth of 51.5% in May, growing for the 36th consecutive month. Increase in business activity was reported by 13 industries, driven by stable global demand.
The index for New Orders registered 52.9% growth in May, marking the fifth straight month of increase. The surge was driven by growth in demand and new online contracts. In May, 11 industries reported growth.
The Employment Index contracted in May, after three consecutive months of expansion. Its reading was 49.2%, down 1.6% from the April reading of 50.8%. While nine industries reported an increase in employment, seven reported a decline. Employment remains restricted since there is no clear idea about the economy's direction.
The Service Sector Remains in Good Shape
As indicated by the overall strength of Services PMI, the service sector remains in good shape, driven by a stable demand environment and improving supply chains.
Sector-specific factors that are currently tailwinds include the essentiality of certain services like waste management, the rise in demand for risk mitigation and consulting services, increased expertise in improving operational efficiency and lower costs, successful work-from-home models and digital transformation.
Given the promising developments in the service sector, investors may consider buying sound stocks from the space. It is crucial to pick winning stocks in order to reap maximum gains.
Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or #2 (Buy) offer the best investment opportunities. You can see the complete list of today's Zacks #1 Rank stocks here.
Green Dot: This financial technology and bank holding company currently has a Zacks Rank #2 and a VGM Score of A.The Zacks Consensus Estimate for 2023 EPS has improved 0.5% in the past 30 days.
Green Dot remains focused on ensuring the long-term growth of its businesses. The company is putting in efforts toward the acquisition of long-term users of its products, improving brands and image, building market adoption and awareness of products, increasing card usage, and customer retention. Its sales and marketing efforts focus on a broad group, ranging from never-banked to fully-banked consumers.
GDOT's long-standing relationship with Walmart is a key driver of its operating revenues. The company has been providing Walmart-branded GPS cards since the launch of the Walmart MoneyCard program in 2007. Operating revenues derived from products and services offered through Walmart represented 21%, 24% and 27% of total operating revenues in 2022, 2021 and 2020, respectively.
Maximus: This provider of business process services to government health and human services programs carries a Zacks Rank #2 and has a VGM Score of A. The Zacks Consensus Estimate for fiscal 2023 EPS has risen 6.3% in the past 30 days.
With more than 40 years of experience, Maximus has grown to be a leading operator of government health and human services programs globally. The company's business process management expertise and ability to deliver cost-effective, efficient and high-scale solutions position it as a lucrative partner to governments.
Maximus maintains solid relationships and a strong reputation with governments and long-term contracts provide it with recurring revenue streams. The company continuously seeks long-term relationships with clients in both existing and adjacent markets. It is also focused on expanding its foothold in clinical services as well as long-term services and support. Moreover, increased longevity and more complex health needs have increased the need for government social benefit and safety-net programs. This should continue driving demand for the company's services.
Rollins: This pest and wildlife control services provider has a Zacks Rank #2 a VGM Score of B. The Zacks Consensus Estimate for 2023 EPS has improved 1.2% in the past 30 days.
Rollins has a balanced approach to organic and inorganic growth. The company's organic revenue growth rate is healthy, driven by strong technician and customer retention. Enhanced benefits are expected to improve employee and customer retention in the upcoming years.
Acquisitions have been acting as a major growth catalyst in Rollins' business strategy. With the help of strategic acquisitions, the company continues to expand its global brand recognition, geographical footprint and revenues. Notably, Rollins completed 31 acquisitions in 2022, 39 in 2021 and 31 in 2020.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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