Recent results at payroll and human resources services provider Paychex (Nasdaq:PAYX) demonstrated that, while it is having little problem in staying profitable during one of the most severe employment contractions in its history, its growth trends are a far cry from what investors have come to expect from the nimblest firm in the industry. However, there is considerable upside for shareholders if Paychex can return to its double-digit growth days.
Judging by recent results at FactSet (NYSE:FDS), the financial services industry is as healthy as ever. However, FactSet’s success is more a reflection of the appeal of its data platforms and research solutions. As a result, clients are remaining loyal despite other major struggles in their businesses. So, while FactSet’s business is very appealing from an investment perspective, its share price currently leaves something to be desired.
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Bed Bath & Beyond (Nasdaq:BBBY) is proving it can thrive during a domestic recession, as sales and earnings during its most recent quarter grew nicely. Indications are that this will prove challenging over the longer term, though a number of smaller store concepts could save the day and same-store sales will inevitably rebound.
Verizon Communications (NYSE:VZ) is in an enviable position as a leader in its two primary business segments. However, maintaining this leadership position may be too costly to consider the stock an appealing investment.
Software provider Adobe Systems (Nasdaq:ADBE) reported third-quarter earnings earlier this week that saw sales and earnings growth suffer in sympathy with a global slowdown in business and advertising activity. This clearly affected Adobe’s customer base of creative professionals, but not its overall profit levels. The key question is whether these current tepid trends are fully built into Adobe’s share price.
Electronics titan Best Buy (NYSE:BBY) is currently getting knocked around as consumers remain in touch with the softer side of their spending enthusiasm. Yet BBY continues to use its dominance during the economic downturn to muscle out weaker rivals and has only a few potential risks that could derail its plans for global consumer electronics dominance.
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On Wednesday, leadership and corporate development non-profit organization the Aspen Institute issued a bold statement to speak out against short-term thinking. It also released a nine page document explaining why it believes that “short-term objectives have eroded faith in corporations” and the foundations of the American economy. The report carries weight for its message, recommendations and the handful of legendary figures that officially signed off on the call to action for investors and corporate managers.
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Diversified branded-apparel provider VF Corp (NYSE:VFC) has seen its share price jump 30% so far in 2009, besting the market’s return (as measured by the S&P 500) of approximately 15%. The stock may stop to catch its breath, but it still has considerable upside as industry conditions improve and because of the low-growth expectations embedded in VFC’s current price.
Executive recruiter Korn/Ferry International (NYSE:KFY) is a bellwether for the health of global corporations as they seek qualified candidates for high-level executive positions. By the yardstick of Korn/Ferry’s first-quarter results, the prognosis for a quick recovery is grim, but it did state that conditions are indeed stabilizing.
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Regional bank SunTrust (NYSE:STI) has seen its capital base eroded by a down economy and historic losses in consumer loans. The potential for further loan losses means that book value figures must be taken with a grain of salt, but if conditions stabilize and SunTrust can return to profit levels seen in days past, there is considerable upside for shareholders.
Investing in restaurant stocks has similar pitfalls to buying equities in the retail industry; consumers are fickle and frequently flock to the hottest or newest store concept. And once they leave, it’s hard to get them back. There is the occasional exception, which in the restaurant industry is Darden Restaurants (NYSE:DRI), as it has found a way to expand its primary concepts yet maintain sales and boost profits at its vast existing store base.
Shares of Boeing (NYSE:BA) took flight last week as the aircraft-manufacturing giant announced concrete plans to make the first test flight of its 787 Dreamliner, a highly anticipated commercial aircraft that has been beset with development delays and was supposed to have had its first test flight in late 2007. The delays have proven costly, but also demonstrate why Boeing deserves consideration as a holding in investor stock portfolios.
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Shares of United Parcel Service (NYSE:UPS), which bills itself as the world’s largest package delivery company, continue to reel as business and consumer activity has slowed dramatically in what has proven to be a very challenging economic environment. This has led to significantly lower levels of package and shipment delivery, which happens to be the bread and butter that keeps UPS ticking. Yet, despite the depressed activity, UPS continues to build out its global infrastructure, and will come out of the current downturn as strong as ever.
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