Fiserv (Nasdaq: FISV) – Fiserv is in the business service industry, providing financial services to businesses worldwide. The company’s services include bill payment processing, mobile banking software, electronic payment processing, and debit and credit card processing. The company is headquartered in Brookfield, Wisconsin and was founded in 1984.
Fiserv has seen its earnings grow at a steady pace in recent years. The average rate of EPS growth has been 15% over the last three years and the company’s earnings grew by 23% in the most recent quarterly report.
Sales haven’t been growing as fast as earnings, but they have been increasing.
The average annual rate of growth has been 4% for the last three years.
Sales were only up by 1% in the most recent quarter.
One area where Fiserv really stands out is in its profitability measurements.
The return on equity is at 41%, the profit margin is at 27%, and the operating margin is at 26.3%.
In addition to the company having strong fundamental readings, the stock is also underappreciated by Wall Street.
There are analysts following the stock and only seven rank the company as a “buy”. The other 16 all rate the stock as a “hold”.
You can see on the weekly chart how Fiserv has been trending higher over the last three years. From the beginning of 2016 through the recent high, the stock has risen steadily with very few pullbacks. The lower rail of the trend channel that has formed during this rally has remained in close proximity to the 52-week moving average.
Suggested strategy: Buy FISV with a maximum entry price of $77.50. I would set a target of at least $105 over the next 12 months (for a potential return of almost 40% from current prices). I would also suggest a stop at $68.
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