Automatic Data Processing, Inc. (ADP) Moving Strangely: Should That Worry Traders?

A handful of technical analysis tools are suggesting that Automatic Data Processing, Inc. (NASDAQ:ADP) overall gets 64% Buy rating. The stock is also flashing a Buy from the Barchart TrendSpotter trading system. Traders hoping to speculate on the ADP’s short-term trajectory should know that short terms indicators for the stock averaged 80% Buy with an average daily trading volume over the past 20 days at 2511700 shares. ADP stock has overall a 0.5% Buy signal considering medium term indicators and the 50-day average daily volume remained almost 2695674 shares. It’s also worth noting that the stock, whose average daily volume over the 100 days prior to this writing was 2373534 shares, is 33% Buy on the basis of long term indicators.

The share price is currently staying around the first support level of $146.95. Below this, the next support is placed in the zone of $146.4. Till the time, the ADP stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 71.56 on daily chart, which may remain a cause for concern. If the price breaks below $146.4 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $147.9 mark may result into a pull-back move towards $148.3 level.

Automatic Data Processing, Inc. (ADP) is projected to climb by 6.51 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $175 price as 12-month high target. This represents a whopping 18.64 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $158, which represents a return potential of 7.11 percent when compared to the closing price of the stock of $147.51 on Monday, February 11. The lowest price target for the stock is $142 — slightly more than -3.74 percent from ADP’s current share price.

Here’s a rundown of insider trading activity for sense of Automatic Data Processing, Inc. (NASDAQ:ADP). The earliest insider trade took place on 02/05/2019. Politi Douglas W parted with a total of 6.04 thousand shares of company at average share price of $145.01. The total for the sales was set at $875.14 thousand. After this transaction, the Corp. VP account balance stood at 22.79 thousand shares. The stock grew 1.72 percent since that insider sale. On 02/05/2019, Siegmund Jan, Corporate Vice President, sold 36.4 thousand shares at a price per share of $145.02. This removed 5.28 million shares from the insider’s fortune and the stock saw a 1.72 percent rally in value since the news became public. This transaction left 50.32 thousand shares in the Corporate Vice President account. On 01/22/2019, Corp. VP Albinson Brock performed a sale transaction worth $51.59 thousand. This sale at $133.99 each has eliminated 0.39 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 10.09 percent increase since the transaction was reported. The insider now is left with 3.76 thousand shares remaining in the account. Ayala John, who performs the Corp. VP job, sold 3.12 thousand shares for $418.15 thousand. The disposal occurred on 01/22/2019 was priced at $133.98 per share. The share price soared 10.1 percent since the reporting date. Ayala John now left with a stake of 13.09 thousand ADP stock worth $1.93 million after the insider selling.

ADP shares accumulated 0.7 points or 0.48 percent on Monday to $147.51 with a light trade volume of 1.907 million shares. After opening the session at $147.19, the shares went as high as $147.74 and as low as $146.79, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $64.3 billion and now has 435.7 million shares outstanding. Automatic Data Processing, Inc. (ADP) stock has gained 11.36 percent of market value in 21 trading days.

Analysts at MoffettNathanson, assumed coverage of Automatic Data Processing, Inc. (NASDAQ:ADP) with Buy recommendation, according to their opinion released on October 04. Analysts at RBC Capital Mkts issued an upgrade from Sector Perform to Outperform for the stock, in a research note that dated back to April 02.

ADP stock has a trailing 3-year beta of 0.96, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $4.23 a share in the trailing twelve months. The stock’s value has surged 12.5 percent year to date (YTD) against a rise of 36.27 percent in 12 month’s time. The company’s shares still trade -3.91 percent away from its 1-year high of $153.51 and 37.08 percent up from 52-week low of $107.61. The average consensus rating on the company is 2.4, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Automatic Data Processing, Inc. (ADP) are trading at a P/E ratio of 34.73 times earnings reported for the past 12 months. The industry ADP operates in has an average P/E of 20.98. Its P/E ratio went as low as 26.62X and as high as 36.65 over the 5-year span. Further, it is sporting a 4.64 on the Price-to-Sales ratio. Compare this with the industry average P/S of 400.15. 48.9 percent is the gross profit margin for Automatic Data Processing, Inc. and operating margin sits at 17.9 percent. Along with this, the net profit margin is 13.1 percent.

ADP will be declaring its Q3 financial results on May 01. Analysts are forecasting revenue to climb 5.8 percent to $3.91B in the next fiscal quarter, while earnings are seen soaring by nearly 11.18 percent to $1.69 per share. History has shown that shares in Automatic Data Processing, Inc. have gone down on 22 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. In last reported earnings results, it earned $1.34 per share, better than the $1.18, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $3.51B, better than the $3.44B analysts expected. Earnings are estimated to increase by -4.9 percent this year, 11.96 percent next year and continue to increase by 16.81 percent annually for the next 5 years.