On January 2, 2013, Zacks Investment Research upgraded
) to a Zacks #1 Rank (Strong Buy).
ALLIANCE DATA (ADS): Free Stock Analysis
COMP SCIENCE (CSC): Free Stock Analysis
EQUIFAX INC (EFX): Free Stock Analysis Report
FIDELITY NAT IN (FIS): Free Stock Analysis
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With a solid return of 41.0% over the past year and positive
estimate revisions, this provider of credit solutions offers an
attractive investment opportunity.
Why the Upgrade?
An upbeat third quarter 2012, acquisition of
Computer Sciences Corp.
) Credit Services business, better visibility in the mortgage
market and strong non-mortgage fundamentals have contributed to
Equifax generated strong revenues in its third quarter of 2012 on
the back of 35.0% year-over-year growth in Mortgage Solutions
revenue. The company expects mortgage activities to maintain
momentum in the coming quarters as home sales should continue to
trend up. Equifax witnessed market share gains in the mortgage
sector, aided by its newly-launched products and services. Hence,
it is expected that strength in its mortgage solutions portfolio
will be a key catalyst in the near term.
Increased mortgage activity and strong performance of
non-mortgage segments led to a 16.0% year-over-year growth in
earnings per share to 75 cents.
There appears to be adequate growth potential given Equifax's
expanding geographical reach and the recent takeover of Computer
Sciences' Credit Services business. As Equifax had been handling
CSC's business for many years, it will take lesser time to
integrate the business within its USCIS segment. The deal will be
accretive to earnings in 2013.
Equifax's leading market position in North America and Europe and
growth in Brazil, which is one of the faster-growing markets in
the world are positives. To tap the immense opportunity in the
Brazilian credit data market, Equifax merged credit reporting
operations of its Brazilian subsidiary with Boa Vista Servicos
S.A., the second-largest consumer credit bureau in Brazil.
All of the 11 estimates for 2012 were raised over the last 60
days. For 2013, 8 out of the 11 estimates moved up.
Despite the positive estimate revisions, the Zacks Consensus
Estimate for 2012 remained unchanged at $2.95 with the Zacks
Consensus Estimate for 2013 moving up 33 cents (10.3%) to $3.54.
Equifax has the potential to post a positive earnings surprise in
the upcoming quarter. For the past four quarters, Equifax has
posted an average surprise of 4.03%.
Other Stocks to Consider:
The following credit services providers with a favorable Zacks
Rank are also performing well and are worth considering.
Fidelity National Information Services Inc.
) has a Zacks #2 Rank (Buy)
Alliance Data Systems Corp.
) has a Zacks #2 Rank (Buy).