Paychex, Inc. (NASDAQ:PAYX)

CAPS Rating: 4 out of 5

Paychex provides payroll, human resource, and employee benefits outsourcing for small and medium-sized businesses.

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Player Avatar Nittany95 (97.63) Submitted: 5/13/2010 8:10:11 AM : Outperform Start Price: $19.95 PAYX Score: -33.22

PAYX is perhaps one of the best potential investments for 2010 - 2011. They will benefit from three trends - 1) a pickup in employment, particularly by small business, 2) a continued move towards outsourcing of administrative duties by HR departments, and 3) Inflation/rising interest rates. The first two will drive top-line growth in their main businesses. The Third will growth in their interest income on funds held for clients. While the turmoil in the current credit markets is delaying the pickup in rates, it will eventually happen. When it does, PAYX growth will far outpace the rest of the industry. Add to the growth a solid balance sheet and you have a pure play winner.

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