Paychex Inc. (PAYX): Today's Featured Diversified Services Laggard

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Paychex ( PAYX) pushed the Diversified Services industry lower today making it today's featured Diversified Services laggard. The industry as a whole closed the day down 0.1%. By the end of trading, Paychex fell $0.80 (-1.8%) to $42.68 on average volume. Throughout the day, 2,831,374 shares of Paychex exchanged hands as compared to its average daily volume of 2,076,300 shares. The stock ranged in price between $42.55-$43.49 after having opened the day at $43.49 as compared to the previous trading day's close of $43.48. Other companies within the Diversified Services industry that declined today were: Ulta Salon Cosmetics & Fragrances ( ULTA), down 4.4%, Odyssey Marine Exploration ( OMEX), down 4.1%, Furiex Pharmaceuticals ( FURX), down 4.0% and Cinedigm ( CIDM), down 4.0%.

Paychex, Inc., together with its subsidiaries, provides payroll, human resource, insurance, and benefits outsourcing solutions for small to medium-sized businesses in the United States and Germany. Paychex has a market cap of $16.0 billion and is part of the services sector. The company has a P/E ratio of 27.7, above the S&P 500 P/E ratio of 17.7. Shares are up 39.8% year to date as of the close of trading on Wednesday. Currently there is 1 analyst that rates Paychex a buy, 3 analysts rate it a sell, and 14 rate it a hold.

TheStreet Ratings rates Paychex as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

On the positive front, Shutterstock ( SSTK), up 7.2%, Korn/Ferry International ( KFY), up 6.4%, Document Security Systems ( DSS), up 5.7% and China Distance Education Holdings ( DL), up 5.2% , were all gainers within the diversified services industry with Infoblox ( BLOX) being today's featured diversified services industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the diversified services industry could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the diversified services industry could consider ProShares Ultra Short Consumer Sers ( SCC).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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