New Lifetime High Reached: Automatic Data Processing (ADP)

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.

Trade-Ideas LLC identified Automatic Data Processing ( ADP) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Automatic Data Processing as such a stock due to the following factors:

  • ADP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $88.2 million.
  • ADP has traded 42,012 shares today.
  • ADP is trading at a new lifetime high.

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More details on ADP:

Automatic Data Processing, Inc., together with its subsidiaries, provides technology-based outsourcing solutions to employers, and vehicle retailers and manufacturers worldwide. The stock currently has a dividend yield of 2.3%. ADP has a PE ratio of 26.8. Currently there are 5 analysts that rate Automatic Data Processing a buy, 1 analyst rates it a sell, and 11 rate it a hold.

The average volume for Automatic Data Processing has been 1.3 million shares per day over the past 30 days. Automatic Data Processing has a market cap of $40.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.83 and a short float of 1.1% with 5.10 days to cover. Shares are up 3.4% year-to-date as of the close of trading on Wednesday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Automatic Data Processing as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 12.2%. Since the same quarter one year prior, revenues slightly increased by 9.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AUTOMATIC DATA PROCESSING has improved earnings per share by 30.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AUTOMATIC DATA PROCESSING increased its bottom line by earning $3.11 versus $2.79 in the prior year. This year, the market expects an improvement in earnings ($3.52 versus $3.11).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the IT Services industry average. The net income increased by 27.2% when compared to the same quarter one year prior, rising from $227.00 million to $288.80 million.
  • Net operating cash flow has slightly increased to $604.50 million or 5.03% when compared to the same quarter last year. In addition, AUTOMATIC DATA PROCESSING has also modestly surpassed the industry average cash flow growth rate of -2.76%.
  • 39.96% is the gross profit margin for AUTOMATIC DATA PROCESSING which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.39% trails the industry average.

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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