Monday, December 21, 2015

Why Paychex (PAYX) Stock Should Be in Every Investor’s Portfolio

Unheralded PAYX stock is poised for strong gains in 2016

Paychex, Inc. (PAYX) isn’t a company that’s typically on the tongues of stock analysts and investors, but it sure is this year. PAYX is beating the pants off the market — and competitor Automatic Data Processing (ADP) — with 14% gains, and is trading at decade-plus highs.

But better yet for new money: This payroll and human resources provider looks set to be among 2016’s most exciting stocks.

Investors can thank a strengthening job market, solid fundamentals and management’s innovative expansion efforts that include both acquisitions and new service offerings.

The November jobs report, which saw payrolls expand at a promising pace, implies general improvement in the state of the U.S. economy. That steady job growth — particularly for small- and medium-sized companies –has helped PAYX remain at the top of the payroll services industry. A strengthening job market means more employers will require payroll processing services, as well as human resources assistance.

Plus, confusion and complications involving Obamacare have been a boon for Paychex stock.

2015 marked the first year in which non-payroll services accounted for more than $1 billion in revenue, as an increasing number of PAYX clients require assistance navigating the new, often-complicated health insurance reforms.

Tuesday, December 01, 2015

Why GoPro Inc (GPRO) Stock Is a Rally Play for 2016

GoPro's Q3 earnings hiccup and Hero5 delay

Investors in action sports camera maker GoPro Inc (GPRO) have watched in horror as shares of GPRO stock have tumbled nearly 74% over the past year. Now, reports that the much-anticipated Hero5 camera won’t be available in time for this year’s holiday season make a swift GoPro stock recovery even less likely.

There’s no denying that GPRO makes a solid action sports video camera, but positive investor sentiment around GoPro stock has all but disappeared.

Among things holding down GoPro: GPRO shares were crushed following an abysmal third-quarter earnings report. The company failed to meet analyst expectations for both revenue and earnings, citing lower-than-expected sales of its Hero4 Session camera. Management took some responsibility, admitting the camera “was initially priced too high, leading to a price cut, and didn’t have a big enough marketing budget.”

Following the earnings release, GoPro CEO Nick Woodman told CNBC, “If Session had been stronger out of the gates, if we hadn’t mispriced it, and if we had backed it up with the marketing it deserved, I think we would have had a very different earnings call yesterday.”

Still, there at least was hope that GPRO stock might be able to turn things around with a strong 2015 holiday shopping season — but those hopes were in part based on the idea that a Hero5 would be popping up before the close of 2015.

And yet … GoPro might not be completely doomed, and in fact, might be worth picking up on the cheap right now.