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Fiserv(FISV - Get Report) is a bank processor that provides services like electronic funds transfer, loan processing, and bill payment for small and midsize banks. The banking business is complex, especially for regional banks that are focused more on their core retail banking operations than they are on the processing services that run behind the scenes. By providing that service, Fiserv has been able to build sticky relationships with more than 16,000 banks.
Fiserv's offerings let banks run the backend of their systems. Because of that, Fiserv is typically deeply integrated into a bank's business. Besides the medium-length contracts that banks have to sign, the enormous cost of switching systems is the biggest reason why customers opt to keep Fiserv around -- changing processors is typically more trouble than it's worth. That gives Fiserv some level of pricing power with its customers and keeps retention around 99%. That's staggering.
>>4 Large Bank Stock Picks From Deutsche Bank
Fiserv may not exactly be cheap right now, but it is benefitting from excellent relative strength in 2012. That's ample reason to expect more upside in shares this summer.
This evening's earnings call could be a big catalyst for shares.
To see all of this week's Rocket Stocks in action, check out
the Rocket Stocks portfolio at Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.