Towers Watson & Co. (TW) has been resilient in the recently choppy market, trading directly below its 52-week high on the heels of a 34% Q1 earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock offers momentum
Company Description
Towers Watson & Co operates as a global professional services company with a specialty in risk, people and financial management. The company changed its name from Watson Wyatt in 2010 and has a market cap of $4.22 billion.
Towers Watson has been flying high in 2011, recently hitting a new multi-year high after reporting another great quarter that came in ahead of expectations.
First-Quarter Results
Revenue for the period was up 8% from last year to $866 million. Earnings also came in strong at $1.26, 34% ahead of the Zacks Consensus Estimate.
The company’s largest segment, Benefits, saw 9% revenue growth from last year to $509 million. Its second largest segment, Risk and Financial Services was up 8% to $208 million.
Financial Profile
Towers Watson will also continue to benefit from its strong balance sheet, with cash and short-term investments of $545 million against total debt of $99 million.
Estimates
We saw some pretty solid movement in estimates off the good quarter, with the current year up 36 cents to $3.77 and the next-year estimate gaining 50 cents to $4.50, a bullish 19% growth projection.
Valuation
But in spite of recent gains, the valuation picture still looks solid, with a PEG ratio (PE/Growth) of .84, safely below the benchmark for value of 1.
12-Month Chart
On the chart, shares have held up well in the recently weak market, trading directly below the 52-week high at $64.21. Look for support from the trend on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
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