The Zacks Analyst Blog features APi Group, IBEX, SPS Commerce and MSCI
For Immediate Release
Chicago, IL – March 9, 2023 – Zacks.com announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events affecting stocks and the financial markets. Stocks recently featured on the blog include: APi Group Corp. APG, IBEX Ltd. IBEX, SPS Commerce, Inc. SPSC and MSCI Inc. MSCI.
Here are the highlights from Wednesday’s analyst blog:
4 stocks to buy as service activity expands in February
The US services sector has staged a solid recovery after decelerating in December. While growth in service activity raises further concerns about rising inflation, the sector has shown resilience as people continue to spend more on services and less on goods.
As a result, activity in the service sector increased in February for the second month in a row. The growth came as new orders and employment surged to a new one-year high. Given this situation, corporate services stocks like API Group Corp., IBEX Ltd., SPS Commerce, Inc. And MSCI Inc. should benefit in the short term.
Activity in the service sector is growing
The Institute for Supply Management reported on March 3 that the services sector’s Purchasing Managers’ Index (PMI) rose to 55.1% in February after rising 55.2% in January. Although slightly slower than January, growth is steady and above the 50% mark. A value above 50 indicates an increase in service activity.
This is also far better than the December reading when the services sector fell to 49.2%.
December’s decline was the first since May 2020. In addition, the service sector has now grown for 31 of the last 32 months, reflecting the economy’s underlying strength despite major challenges such as multi-year high inflation.
February’s growth came on the back of a solid jobs report, which saw employment levels hit a one-year high, and a pick-up in new orders, suggesting the economy continued to grow despite inflationary pressures in the first quarter of 2023.
In February, service activity increased in 13 sectors, led by construction, retail, accommodation, food, and professional, scientific and technical services. However, information and wholesale trade were two of the four industries that saw a decline.
The survey also says a surge in new orders indicates an expanding economy. The new orders index rose to 62.6% in February after rising 60.4% in January. The Supplier Delivery Index was 47.6% in February, recording the fastest delivery performance since June 2009.
The February reading is 2.4% lower than the unchanged January reading of 50%. Supplier Deliveries is the only inverse index in the ISM Annual Report. A number above 50% indicates slower deliveries, which is normal when the economy is recovering and customer demand is increasing.
The growth in service activity gives reason to be optimistic that the economy has not yet succumbed to inflationary pressures. This is especially true as manufacturing output has declined and consumer spending is more constrained due to rising raw material costs.
The current situation presents an ideal opportunity to invest in these four stocks.
API Group Corporation provides critical pipeline integrity and construction services for energy companies, utilities, government agencies and contractors, as well as end-to-end fire protection solutions including fire protection system design, installation, inspection and maintenance.
APi Group Corporation’s expected earnings growth rate for the current year is 12%. The Zacks consensus estimate for the year to date is up 7.2% over the past 60 days. APG currently has a Zacks Rank #1 (Strong Buy). You can see the full list of today’s Zacks #1 Rank stocks can be found here.
IBEX Limited is a provider of outsourced CX solutions. IBEX provides customer support, technical support, inbound/outbound sales, business intelligence and analytics, digital demand generation and CX surveys, and feedback analysis services.
The expected earnings growth rate of IBEX Limited for the current year is 29.6%. The Zacks consensus estimate for the year to date is up 16.3% over the past 60 days. IBEX currently has a Zacks Rank #2 (Buy).
SPS Commerce, Inc. is a provider of on-demand supply chain management solutions, bringing integration, collaboration, connectivity, transparency and data analytics to its customers worldwide. SPSC delivers its solutions over the Internet using a software-as-a-service model to improve the way suppliers, retailers, distributors and other customers manage and fulfill orders.
SPS Commerce’s expected year-to-date earnings growth rate is 13.2%. The Zacks consensus estimate for the year to date is up 9% over the past 60 days. SPSC currently carries a #1 Zacks rank.
MSCI Inc. provides tools to support investment decisions. MSCI services include portfolio construction and risk management products and services; environmental, social and governance research and ratings; and real estate research, reporting and benchmarking offerings.
MSCI Inc.’s expected earnings growth rate for the year to date is 11.8%. The Zacks consensus estimate for the year to date is up 1.3% over the past 60 days. MSCI currently carries a Zacks rank #2.
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