Human resource and business solutions provider
) was selected by Independent Community Bankers of America (ICBA)
as their Preferred Service Provider. ICBA represents 6,500
community banks operating in the U.S.
The alliance therefore allows Insperity to offer its human
resource, financial and pay roll-related services to a wider number
of clients. Likewise, the community banks selecting Insperity's
products and services will now be able to consolidate their
administrative operations and focus on providing enhanced services
to their customers instead.
Insperity provides human resources as well as business solutions
to small and medium businesses to help them perform better. We
expect the current partnership with ICBA to improve the company's
It is worth noting that in the last-reported quarter,
Insperity's revenues increased 4.1% on a year-over-year basis. The
improvement was attributed to higher average paid worksite
employees (up 2.3%) and higher revenue per worksite employee (up
1.7%). The company reported average client retention of 87.0%
during the quarter. Nonetheless, higher-than-expected expenses
impacted the bottom line.
We believe management's initiatives to expand the number of
Business Performance Advisors and implement a healthcare reform
strategy will be beneficial in the long run. Moreover, the
company's software-as-a-service and other adjacent business
services are gaining traction and are expected to help improve 2014
Although the company has a debt-free balance sheet, competition
Automatic Data Processing Inc.
) remain the headwinds. Moreover, the company provided a tepid full
year guidance, which will remain an overhang on the stock.
Currently, Insperity has a Zacks Rank #5 (Strong Sell).
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