Is ADP Trending Toward $50 and Beyond?

If you took advantage of Automatic Data Processing's (ADP) meandering this summer near $39, you made the correct move, as the shares have moved smartly higher, taking out resistance at $40. Moreover, ADP, which I first wrote about on May 8, 2009, at a price of $36.84, is still favored at this juncture. Here's why: ADP's FY2011 revenue will likely increase 2% to 3%, collared by lower-than-expected U.S. monthly job growth and business formation. Look for FY2012 revenue to rise 4% to 6%. Longer-term, however, the payroll outsourcing market has ample room for market share gains and the mining of new client theatres, especially small/medium sized businesses, also is appealing. International business opportunities and a strong balance sheet further supports the favorable view. Continue reading the article.