CBIZ, CoreLogic, CRA International, Visa and Mastercard Highlighted in the Zacks Industry Outlook
Industry: Business Services
The earnings picture for the Business Services group is better than broader market. In the just-completed third quarter reporting season, total earnings for the sector were up 5.9% from the same period last year, which compares to no growth for the S&P 500. Total revenues for the sector were up 0.6% in the quarter, compared to the 0.7% decline for the S&P 500 as well.
In terms of surprises, the sector's performance was weaker than the broader market, with only 57.9% of Business Services companies beating earnings expectations, compared to the 'beat ratio' of 62.8% for S&P 500. The variance is far more pronounced in the fourth quarter, when total earnings for the sector are expected to be up 15.3% from the same period last year, while total earnings for the S&P 500 would be up only 2.3%.
Zacks Industry Rank
The Zacks Industry Rank, which derives its predictive power from the time-tested Zacks Rank, helps us identify the industries that are expected outperform others. The top 1/3rd of the Zacks Industry Rank qualify as industries with 'Good' prospects, the bottom 1/3rd have 'Bad' prospects, and middle 1/3rd as 'Neutral.' Most of the constituent 'industries' in the business services sector fall in the top 1/3rd of the list.
For example, the Consulting industry is currently at # 33 which puts in the top 15% of the industries. Of the 18 companies in the Consulting industry, 8 have Zacks #1 Rank (Strong Buy) or Zacks #2 Rank (Buy), while only two have Zacks #5 Rank (Strong Sell) or Zacks #4 Rank (Sell). Companies like CBIZ (CBIZ), CoreLogic (CLGC) and CRA International (CRAI) all have Zacks #2 Rank (Buy). The Financial Transaction Services industry, with players like Visa (V) and Mastercard (MA), is currently at 54 or in the top 22% of industries.
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