Today's Technical View on Automatic Data Processing and TIBCO Software: Business Software Stocks have Good Future

Feb 19, 2013, 08:14 ET from

LONDON, February 19, 2013 /PRNewswire/ --

Business IT sector grows in tandem with general economy. With growth in the general economy, these companies are in a better position to perform well. The impact of an improvement in the economy and a decline in unemployment rate is clearly visible on the fortunes of Automatic Data Processing Inc. (NASDAQ: ADP) as it reported strong results as well as rosy outlook. Tibco Software Inc. (NASDAQ: TIBX) is also performing well despite the company facing rather tough market conditions. However, the company is bound to bounce back in the near future. StockCall initiated free in-depth technical analysis on Automatic Data Processing and TIBCO Software which are currently available upon sign up at

Automatic Data Processing on Growth Trajectory

Automatic Data Processing reported a 7 percent year-over-year increase in its revenue for its fiscal second quarter of 2013. The company also provided bright outlook for the full year and expects its EPS and revenue to grow by 5 percent. The company seems to benefit from a decline in unemployment rate in the U.S. In the past 12 months, its stock notched up a 13 percent growth and it is expected to grow further with the improvement in the economy. Sign up for the free technical analysis on Automatic Data Processing Inc. at  

Automatic Data Processing plans to grow by introducing new services. It has introduced Workforce NOW and Vantage HCM. These suites will help the company to capture new markets. ADP already holds a leadership position in its field and is likely to retain it. The stock offers nearly 3 percent dividend yield. With its payout ratio at 55 percent, the dividend seems to be safe into the near future. The company also has a robust balance sheet to keep its dividend payment intact. It recently declared a regular quarterly dividend of 43.5 cents per share. The dividend is payable on April 1st. With strong fundamentals, growth avenue and steady dividend payment, Automatic Data Processing's stock is an attractive investment venue.

Tibco Software Beats EPS Estimates

Tibco Software's stock is up 4 percent on a YTD basis but the company is showing a declining trend for its revenue. The company lately had been missing its estimates. However, it still maintains a strong position in its target markets. Another weak point for the company is the deterioration of its margins. Its fourth quarter results showed 2.4 percent growth for its revenue to $296.5 million, while it was expected to announce revenue at $297.9 million. However, its adjusted profit at 42 cents per share was better than consensus estimate of 39 cents per share. Download the free report on TIBCO Software Inc. by registering at  

Tibco Software is realigning its business and brought about changes in the company's management. However, these steps are expected to yield results in mid- to long-term. Tibco Software declined to provide any guidance for its coming quarter or financial year, which is a negative sign. Though, Tibco beat consensus estimates for EPS, this was mainly due to the subdued preliminary figures provided by the company which prompted industry trackers to scale back their estimates. The company has good growth potential, but needs to work on its execution front. In the absence of any positive catalyst, the stock seems to have low upside potential. However, at the very same time, Tibco Software sports a robust balance sheet which may help it to navigate through rough times.

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