On Dec 31, Zacks Investment Research upgraded Insperity Inc. (NSP) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Apart from strong third-quarter 2014 results, the current optimism surrounding the stock can be attributed, to some extent, to Insperity’s special cash dividend of $2 per share paid on Dec 26 to shareholders of record as of Dec 15. This payment comes in addition to the quarterly dividend payment of 19 cents per share announced on Nov 14. Such rewards boost investors’ confidence in the stock.
We believe that the company’s sound financial position motivates it to undertake shareholder-friendly moves. Insperity ended the third quarter with cash and marketable securities of $225.4 million versus $212.3 million in the prior quarter. Moreover, the company did not have any long-term debt.
Further, Insperity posted better-than-expected third-quarter results on Nov 3. The company recorded earnings per share of 33 cents, which beat the Zacks Consensus Estimate of 23 cents. Revenues grew 3.8% year over year to $560.3 million. The year-over-year improvement was attributed to higher average paid worksite employees (up 1.8%) and higher revenues per worksite employee (up 2%).
Over the last 60 days, all 5 estimates for the current fiscal moved up, raising the Zacks Consensus Estimate by 8.9% to $1.10. Also, 3 out of 5 estimates for fiscal 2015 were raised, translating into 2.3% rise in the Zacks Consensus Estimate to $1.31 over the same period of time.
Insperity provides human resources as well as business solutions to small and medium-sized businesses to help them perform better. We believe management’s initiatives to expand the number of Business Performance Advisors and implement a healthcare reform strategy will be beneficial over the long run. Moreover, the company’s software-as-a-service and other adjacent business services are gaining traction, which are expected to improve its results, going forward.
Other Stock to Consider
Other stocks in the staffing industry that are currently performing well include Cross Country Healthcare Inc. (CCRN), CTPartners Executive Search Inc. (CTP) and Korn/Ferry International (KFY). Cross Country and CTPartners sport a Zacks Rank #1, while Korn/Ferry International holds a Zacks Rank #2 (Buy).
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