Shares of Paychex (PAYX) - Get Report are climbing Tuesday, up about 3.5% and within a stone's throw of new 52-week highs. The company beat on earnings per share and revenue expectations. Management also raised its full-year guidance for revenue and operating income.
The company reported a "magnificent" result and the guidance raise was important as well, TheStreet's Jim Cramer said on CNBC's "Stop Trading" segment.
Cramer also took to a recent research report from the analysts at Citi, who issued a sell rating on Sept. 29. The analyst argued that shares of Paychex remain overvalued and as a result, assigned a price target of $53. Sometimes sell ratings don't work out very well and this is a very good example of that, he reasoned.
Now Paychex is off to the races, he said, joking that perhaps the research report would now be best served as kindling for a fire. "It's got to be good for something," Cramer added.
Many thought Paychex would be a huge winner under the new White House administration. Higher interest rates, a stronger economy and an improved employment situation all benefit Paychex and its bottom line. However, shares have not traded the way many thought, nearly hitting a 52-week low in mid-August.
Shares are now up 7.5% on the year and will perhaps continue higher, as it now closes in on new annual highs. As many investors can tell, it's had a tight trading range over the past 12 months.
- Why Lennar, GM Are Finally Showing Big Gains, Jim Cramer Reveals
- Why Tesla's October Tractor Trailer Reveal Will Cause Billionaire Buffett to Cry
More of What's Trending on TheStreet:
- Let's Talk About Guns, Gun Makers and the 2nd Amendment After Las Vegas Shooting
- Tesla Just Embarrassed Itself By Badly Whiffing On Its Model 3 Goals
- J.C. Penney's Awful Year Comes at the Hands of Brutal Discounting
- 4 Reasons We Could Have Another October Stock Market Crash
At the time of publication, Cramer's Action Alerts PLUS had no position in any companies mentioned.