Paychex, Inc. (PAYX) Stock: Here’s Why It’s Gaining In Value

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Paychex, Inc. (PAYX) is trending up in the market today. The stock, one that is focused in the service sector, is presently priced at $78.44 after gaining -1.36% so far in today’s session. In terms of service sector companies, there are quite a few factors that have the potential to cause movement in the market. News is one of the most common reasons for movement. Here are the most recent trending headlines surrounding PAYX:

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Mar-21-19 05:20PM Cynergistek (CTEK) to Post Q4 Earnings: What’s in Store?
04:49PM Why Xerox (XRX) Intends to Sell Customer Financing Business?
07:39AM ABM Industries Extends Janitorial Services Alliance With AEG
Mar-20-19 11:09AM IQV or DLPH: Which is a Better Technology Services Stock?
10:30AM Paychex (PAYX) Earnings Expected to Grow: What to Know Ahead of Next Week’s Release

However, when making an investing decision, prospective investors should look at far more than just news, this is especially the case in the ever incredibly complex service sector. Here’s what’s happening in regard to Paychex, Inc..

Performance Trends That We’ve Seen From PAYX

While a move up in a single session, like what we’re seeing from Paychex, Inc. might lead to fear in some investors, that alone shouldn’t be the reason for a decision to, or not to, buy a company’s stock. It is always important to dig into trends experienced by the stock beyond a single trading day. In the case of PAYX, below are the movements that investors have seen:

  • Past 5 Trading Sessions – Throughout the last five trading sessions, PAYX has generated a change in value that amounts to -1.00%.
  • Monthly – The monthly performance from Paychex, Inc. comes to 4.10%.
  • Past 3 Months – Throughout the past 3 months, the company has generated a ROI of 21.12%
  • Past Six Months – Throughout the previous six months, we have seen a change of 6.01% from the company.
  • Year To Date – Since the open of this year PAYX has produced a return of 20.40%.
  • Annually – Lastly, over the last year, we have seen a change in the amount of 19.66% from PAYX. In this period, the stock has sold at a high price of -1.69% and a low of 32.14%.

Ratios Of Note

Looking at a few key ratios associated with a company can give prospective investors a view of just how dangerous and/or potentially profitable a stock pick may be. Below are some of the important ratios to consider when digging into PAYX.

Short Ratio – The short ratio is a measure of short interest. As the ratio goes higher, it means that more investors are expecting that the value of the stock is going to head up. Throughout the sector, strong service stocks tend to have a lower short ratio. On the other hand, we also see a lot of short squeezes in the industry. Nonetheless, in regard to Paychex, Inc., it’s short ratio amounts to 5.41.

Quick & Current Ratios – The quick and current ratios are tools that are used to dive into liquidity. Basically, they measure the company’s abilities to pay its debts as they mature based on quick assets or current assets. come with strong current and quick ratios. When it comes to PAYX, the quick and current ratios total up to 1.20 and 1.20 respectively.  

Book To Share Value – The book to share value ratio compares the the share price to the book value of assets owned by the company. In this particular case, the book to share value ratio works out to 6.75.

Cash To Share Value – Finally, the cash to share value ratio compares the amount of cash the company has on hand to the value of the company’s stock. As it relates to PAYX, the cash to share value is 2.12.

Is Big Money Interested In Paychex, Inc.

One thing I’ve come to understand in my short period alive, or somewhat alive is that smart money tends to follow big money players. That is to say, investors that are trying to keep the risk down will pay close attention to trades made by institutions as well as insiders. So, what does the big money picture look like in regard to PAYX? Here’s the information:

Institutions own 70.40% of the company. Institutional interest has moved by -2.00% over the past three months. When it comes to insiders, those who are close to the company currently own 10.50% percent of PAYX shares. Institutions have seen ownership changes of an accumulative -0.36% over the last three months.

How Analysts Feel About Paychex, Inc.

Although it’s never a smart idea to blindly follow the opinions of analysts, it is a smart idea to consider their opinions when validating your own thoughts when it comes to making an investment decision in the service space. Here are the most recent moves that we have seen from analysts as it relates to PAYX.

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Jan-08-19 Upgrade BofA/Merrill Underperform → Neutral
Oct-04-18 Initiated MoffettNathanson Neutral $79
Oct-02-18 Upgrade Credit Suisse Neutral → Outperform
Aug-14-18 Downgrade JP Morgan Neutral → Underweight
Apr-17-18 Downgrade BofA/Merrill Neutral → Underperform

Earnings

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $3.09. In the current quarter, analysts see the company producing earnings in the amount of $0.88. Over the last 5 years, PAYX has generated revenue in the amount of $7.80% with earnings coming in at 8.10%. On a quarter over quarter basis, earnings have seen movement of 18.60% and revenue has seen movement of 7.00%.

What’s Going On With Share Counts?

Traders tend to have an interest in the amounts of shares both outstanding and available. With respect to Paychex, Inc., currently there are 358.00M with a float of 320.22M. This means that out of the total of 358.00M shares of PAYX that are out there today, 320.22M are available to trade hands on the market.

It’s also important to pay attention to the short percent. After all, if a large percentage of the float is sold short, the overall opinion in the market is that the company is headed for a dive. When it comes to PAYX, the percentage of the float that is sold short comes to a total of 3.26%. Most traders believe that a concerning short percent of the float would be any percentage over 40%. However, I have found that a short percent of the float over 26% is usually a play that comes with hefty risk.

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