Automatic Data Processing (ADP): Today's Featured Technology Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Automatic Data Processing ( ADP) pushed the Technology sector lower today making it today's featured Technology laggard. The sector as a whole closed the day up 0.7%. By the end of trading, Automatic Data Processing fell 97 cents (-1.7%) to $56.40 on heavy volume. Throughout the day, 3.9 million shares of Automatic Data Processing exchanged hands as compared to its average daily volume of 1.8 million shares. The stock ranged in price between $55.84-$57.15 after having opened the day at $57.14 as compared to the previous trading day's close of $57.37. Other companies within the Technology sector that declined today were: Ebix ( EBIX), down 14.1%, Daystar Technologies ( DSTI), down 13.9%, eOn Communications Corporation ( EONC), down 13.4%, and Trio-Tech International ( TRT), down 12.8%.
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Automatic Data Processing, Inc. provides business outsourcing solutions. The company operates in three segments: Employer Services, Professional Employer Organization (PEO) Services, and Dealer Services. Automatic Data Processing has a market cap of $28.75 billion and is part of the computer software & services industry. The company has a P/E ratio of 21, above the S&P 500 P/E ratio of 17.7. Shares are up 9.9% year to date as of the close of trading on Friday. Currently there are 10 analysts that rate Automatic Data Processing a buy, two analysts rate it a sell, and 12 rate it a hold.

TheStreet Ratings rates Automatic Data Processing as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, increase in net income and growth in earnings per share. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

On the positive front, Vringo ( VRNG), up 42.6%, Nam Tai Electronics ( NTE), up 41.2%, icad ( ICAD), up 39.5%, and iGo ( IGOI), up 28.3%, were all gainers within the technology sector with TE Connectivity ( TEL) being today's featured technology sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the technology sector could consider Technology Select Sector SPDR ( XLK) while those bearish on the technology sector could consider ProShares Ultra Short Technology ( REW).

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