Automatic Data Processing (Nasdaq: ADP) is a human resource outsourcing firm, offering clients payroll, benefits administration, compliance and other services. The stock has been trending higher over the last few years before pulling back in this recent market downturn. There could be some good news, however, as the stock hit two levels this week that could act as support and help propel it higher.
In August, the stock dipped down to the $128 level before rallying up above the $150 level in early October. The stock dipped down to the $128 area again on Thursday before bouncing back.
The stock also dipped below its 52-week moving average this week, which is the first time it has dipped below the trendline in October 2016. From that point, the stock rallied from the $81.50 area to $115 within the year.
ADP scores very well in its fundamental ratings. The company gets an 89 rating in Investor’s Business Daily’s EPS rating system and it gets an A in the SMR category. The company has seen its earnings grow by 15% per year over the last three years and sales have grown by 7% per year during that same time period. The company boasts a return on equity of 52.2% and a profit margin of 19.7%. As good as those fundamental statistics are, they haven’t helped much during this recent slide in the overall market. If we see a bounce in the overall market, companies with strong fundamentals should see the biggest benefit.
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where ADP advanced for three days, in of 333 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
The Momentum Indicator moved below the 0 level on May 03, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on ADP as a result. In of 109 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for ADP turned negative on May 02, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 46 similar instances when the indicator turned negative. In of the 46 cases the stock turned lower in the days that followed. This puts the odds of success at .
ADP moved below its 50-day moving average on May 02, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for ADP crossed bearishly below the 50-day moving average on April 05, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 12 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ADP declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 81, placing this stock better than average.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (23.753) is normal, around the industry mean (9.924). P/E Ratio (29.073) is within average values for comparable stocks, (46.813). Projected Growth (PEG Ratio) (2.758) is also within normal values, averaging (3.056). Dividend Yield (0.021) settles around the average of (0.036) among similar stocks. ADP's P/S Ratio (5.855) is slightly higher than the industry average of (1.457).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. ADP’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a provider of business outsourcing solutions
Industry PersonnelServices