Automatic Data Processing, Inc. engages in the provision of cloud-based human capital management (HCM) solutions worldwide. It operates in two segments, Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers strategic, cloud-based platforms, and human resources (HR) outsourcing solutions. This segment's offerings include RUN Powered by ADP, a software platform for small business payroll, HR management, and tax compliance administration; ADP Workforce Now, a HCM solution used across mid-sized and large businesses to manage employees; and ADP Vantage HCM, a solution for HR management, benefits administration, payroll services, time and attendance management, and talent management. The PEO Services segment provides HR and employment administration outsourcing solutions under ADP TotalSource name to businesses through a co-employment model. The segment also provides employee benefits, protection and compliance, talent engagement, expertise, comprehensive outsourcing, and recruitment process outsourcing services. The company was founded in 1949 and is headquartered in Roseland, New Jersey.

Automatic Data Processing, Inc.

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Industrial Select Sector SPDR Fund (Symbol: XLI) where we have detected an approximate $121.2 million dollar inflow -- that's a 0.5% increase week over week in outstanding units (from 148,276,000 to 149,076,000). Among the largest underlying components of XLI, in trading today Union Pacific Corp (Symbol: UNP) is up about 0.9%, Deere & Co. (Symbol: DE) is up about 0.9%, and Automatic Data Processing Inc. (Symbol: ADP) is relatively unchanged. For a complete list of holdings, visit the XLI Holdings page » The chart below shows the one year price performance of XLI, versus its 200 day moving average:
Looking at the chart above, XLI's low point in its 52 week range is $112.75 per share, with $152.475 as the 52 week high point — that compares with a last trade of $151.75. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
ONTO Videos
ESQ Videos
Institutional Holders of TBA
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

XLI, UNP, DE, ADP: ETF Inflow Alert

In trading on Thursday, shares of Automatic Data Processing Inc. (Symbol: ADP) crossed above their 200 day moving average of $301.19, changing hands as high as $302.05 per share. Automatic Data Processing Inc. shares are currently trading up about 0.5% on the day. The chart below shows the one year performance of ADP shares, versus its 200 day moving average:
Looking at the chart above, ADP's low point in its 52 week range is $244.6501 per share, with $329.9295 as the 52 week high point — that compares with a last trade of $301.98. The ADP DMA information above was sourced from TechnicalAnalysisChannel.com
Click here to find out which 9 other dividend stocks recently crossed above their 200 day moving average »
Also see:
Cheap Shares To Watch
MHI Dividend History
CBLK market cap history
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Automatic Data Processing Breaks Above 200-Day Moving Average - Bullish for ADP

Below is Validea's guru fundamental report for AUTOMATIC DATA PROCESSING INC (ADP). Of the 22 guru strategies we follow, ADP rates highest using our Multi-Factor Investor model based on the published strategy of Pim van Vliet. This multi-factor model seeks low volatility stocks that also have strong momentum and high net payout yields.
AUTOMATIC DATA PROCESSING INC (ADP) is a large-cap growth stock in the Software & Programming industry. The rating using this strategy is 87% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of AUTOMATIC DATA PROCESSING INC
More Information on Pim van Vliet
About Pim van Vliet: In investing, you typically need to take more risk to get more return. There is one major exception to this in the factor investing world, though. Low volatility stocks have been proven to outperform their high volatility counterparts, and do so with less risk. Pim van Vliet is the head of Conservative Equities at Robeco Asset Management. His research into conservative factor investing led to the creation of this strategy and the publication of the book "High Returns From Low Risk: A Remarkable Stock Market Paradox". Van Vliet holds a PhD in Financial and Business Economics from Erasmus University Rotterdam.
Additional Research Links
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

ADP Quantitative Stock Analysis

Tuesday, July 1, 2025
Markets were mixed on this first trading day of July, kicking off a holiday-shortened week. Off successive all-time closing highs on the S&P 500 and Nasdaq, both took a breather: -0.11% and -0.82%, respectively. The blue-chip Dow and small-cap Russell 2000, however, were able to catch up somewhat: +0.91% and +0.94%, respectively.
This was about as clear-cut and regimented a rotation play as we are likely to see: on the first day of the second half of 2025 (2H25), tech stocks lagged after a very strong first half of the year, while healthcare led the way. Amgen AMGN gained +4% and Merck MRK was up +3.4% in regular trading today, and the Dow is now -1% from its all-time highs.
Senate Republicans also passed the gigantic tax cut and immigration funding reconciliation bill by a tie-breaking vote from Vice President JD Vance. We already knew Rand Paul (R-KY) and Thom Tillis (R-NC) were “no” votes; they added Susan Collins (R-ME) but saw Lisa Murkowski (R-AK) vote for the bill in the end. Due to the changes made in the Senate, the bill must now re-pass the House before finding its way to President Trump’s desk for signing into law.
Economic Prints Informed Today’s Stock Market
The latest Job Openings and Labor Turnover Survey (JOLTS), for the month of May, came out this morning, with 7.8 million job openings jumping up from an expected further dwindling to 7.3 million from an upwardly revised 7.4 million the prior month. Job Quits and Layoffs/Discharges were little changed at 3.3 million and 1.6 million, respectively.
The highest level of job openings came from Accommodation/Food Service at +314K, followed by Finance/Insurance at +91K. The Federal Government was down -39K jobs in the month. A little more than three years ago, we saw a record-high headline of 12.2 million job openings. We continue to moderate these levels, at least as of May.
Both S&P final Manufacturing PMI and ISM Manufacturing data for June came in stronger than expected, with the S&P headline outpacing estimates by 90 basis points (bps) to 52.9 and ISM hitting 49.0% from an expected 48.6%. Construction Spending for May, on the other hand, fell -20 bps lower than projected to -0.3% from an upwardly revised -0.2% the prior month.
Constellation Brands Misses Q1 Estimates
Alcoholic beverage provider Constellation Brands STZ missed estimates on both top and bottom lines after today’s close, with earnings of $3.22 per share on revenues of $2.52 billion coming up short of $3.38 per share and $2.57 billion, respectively, on the Zacks consensus. Softer consumer demand led to lower results in wine and beer sales, but the company did reiterate its guidance for full-year revenues. Shares are down marginally on the news, but -24% year to date. (You can see the full Zacks Earnings Calendar here.)
What to Expect from the Stock Market Wednesday
The big report coming out tomorrow morning is the private-sector payroll tally from Automatic Data Processing ADP. Expectations are for something of a bounceback from last month’s paltry 37K new private-sector jobs filled: 100K is expected — still low from an historical perspective, but it would be an improvement from the trailing 4-month average gain of 82K. This level is borderline just enough to cover for Baby Boomer (and older GenX) retirees per month.
Questions or comments about this article and/or author? Click here>>
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Constellation Brands Inc (STZ) : Free Stock Analysis Report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Trading Rotation Kicks Off 2nd Half of 2025

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco NASDAQ 100 ETF (Symbol: QQQM) where we have detected an approximate $175.1 million dollar inflow -- that's a 6.8% increase week over week in outstanding units (from 15,720,000 to 16,790,000). Among the largest underlying components of QQQM, in trading today Tesla Inc (Symbol: TSLA) is off about 6%, NVIDIA Corp (Symbol: NVDA) is up about 1.4%, and Adobe Inc (Symbol: ADBE) is lower by about 0.3%. For a complete list of holdings, visit the QQQM Holdings page » The chart below shows the one year price performance of QQQM, versus its 200 day moving average:
Looking at the chart above, QQQM's low point in its 52 week range is $115.3511 per share, with $164.78 as the 52 week high point — that compares with a last trade of $162.77. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Free Report: Top 7%+ Dividends (paid monthly)
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Invesco NASDAQ 100 ETF Experiences Big Inflow

Paychex (NASDAQ:PAYX) fell by nearly 10% in Wednesday’s trading after the payroll processing company posted its Q4 FY’25 results (fiscal year ends in May). While revenue rose 10% year-over-year to $1.43 billion and adjusted earnings rose 6% to $1.19 per share, the company’s FY’26 guidance appeared to disappoint the markets. Paychex expects revenue to grow by 16.5% to 18.5% next year, slightly below consensus expectations. The company is also facing some headwinds, including integration challenges related to the recent acquisition of Paycor, which closed in April, and higher interest expenses stemming from the debt used to finance the deal. Additionally, the expiration of the Employee Retention Tax Credit (ERTC) program has weighed on revenue growth to an extent. The ERTC was a Covid-19 era tax incentive that drove up demand for payroll tax credit services, as companies needed help with claiming the credit. Despite some headwinds, the Paycor deal offers meaningful long-term benefits. It expands Paychex’s reach beyond its core base of small and mid-sized businesses customers, adding a roster of bigger clients. Over time, cost and revenue synergies are also expected to be realized, helping to improve overall profitability.
That said, we believe there are concerns with PAYX stock, with its current valuation looking a bit high. We arrive at our conclusion by comparing the current valuation of PAYX stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Paychex along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a strong operating performance and financial condition, as detailed below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
How Does Paychex’s Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, PAYX stock looks expensive compared to the broader market.
• Paychex has a price-to-sales (P/S) ratio of 10.1 vs. a figure of 3.1 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 34.3 compared to 20.9 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 31.6 vs. the benchmark’s 26.9
Paychex’s Revenues have grown marginally over recent years.
• Paychex has seen its top line grow at an average rate of 6.6% over the last 3 years (vs. increase of 5.5% for S&P 500)
• Its revenues have grown 4.3% from $5.2 Bil to $5.4 Bil in the last 12 months (vs. growth of 5.5% for S&P 500)
• Also, its quarterly revenues grew 4.8% to $1.5 Bil in the most recent quarter from $1.4 Bil a year ago (vs. 4.8% improvement for S&P 500)
Paychex’s profit margins are considerably higher than most companies in the Trefis coverage universe.
• Paychex’s Operating Income over the last four quarters was $2.3 Bil, which represents a considerably high Operating Margin of 41.5%
• Paychex’s Operating Cash Flow (OCF) over this period was $1.8 Bil, pointing to a high OCF Margin of 32.7% (vs. 14.9% for S&P 500)
• For the last four-quarter period, Paychex’s Net Income was $1.7 Bil – indicating a considerably high Net Income Margin of 32.0% (vs. 11.6% for S&P 500)
Paychex’s balance sheet looks very strong.
• Paychex’s Debt figure was $864 Mil at the end of the most recent quarter, while its market capitalization is $50 Bil (as of 6/25/2025). This implies a very strong Debt-to-Equity Ratio of 1.6% (vs. 19.4% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $1.6 Bil of the $11 Bil in Total Assets for Paychex. This yields a strong Cash-to-Assets Ratio of 14.3%
PAYX stock has fared slightly worse the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on PAYX stock? Our dashboard How Low Can Paychex Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes.
Inflation Shock (2022)
• PAYX stock fell 25.4% from a high of $141.23 on 6 April 2022 to $105.37 on 26 April 2023, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 14 October 2024
• Since then, the stock has increased to a high of $159.78 on 8 June 2025 and currently trades at around $140
Covid Pandemic (2020)
• PAYX stock fell 44.2% from a high of $90.23 on 20 February 2020 to $50.39 on 23 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 9 November 2020
Global Financial Crisis (2008)
• PAYX stock fell 55.9% from a high of $46.31 on 8 August 2007 to $20.43 on 9 March 2009, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 31 October 2014
Putting All The Pieces Together: What It Means For PAYX Stock
In summary, Paychex stock has strong fundamentals, with reasonable growth, strong profitability and financial stability. That said, the company’s high valuation and slightly weak downturn resilience should give investors some pause. The rich valuation of PAYX stock limits its upside potential in the near-to-mid term. As an alternative, the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Buy The Dip As Paychex Drops 10%?

It’s the final day of the first half of 2025, and market indexes are once again at all-time highs on the S&P 500 and Nasdaq, closing-in on the Dow and small-cap Russell 2000. We’re also roughly +20% from near-term lows, in early April of this year. In short, it’s been quite a rollercoaster ride for investors.
We are light on economic prints today, but not for the week: despite a shortened trading week in observance of Independence Day on the 4th of July Friday, this is Jobs Week: including a new Job Openings and Labor Turnover Survey (JOLTS) tomorrow, private-sector payrolls from Automatic Data Processing ADP on Wednesday, and the U.S. Employment Report on Thursday, joining normal Thursday Weekly Jobless Claims.
Among the most important number we’ll be checking closely are the ADP figures, which came in at their lowest levels in more than two years at +37K, with negative monthly tallies of -17K in Professional/Business Services, -13K in Education/Healthcare and Trade/Transportation/Utilities -4K. Also, Continuing Jobless Claims last week came in at their highest level in 3 1/2 years, closing in on 2 million longer-term jobless claims for week.
Expected Reports This Week Aside from Jobs
This week, we’ll also see the final print on U.S. Manufacturing and Services PMI from S&P and ISM. In addition, Construction spending, Factory Orders and Auto Sales will also hit the tape. And this is before mentioning that the one of the most consequential tax bills in U.S. history is in the process of making its way to President Trump’s desk for signing on July 4th.
After today’s open, we’ll see a new Chicago Business Barometer (PMI) for June. It is expected to crank up to 43.0 from 40.5 reported last month. This would be consistent with business outlooks improving, partly on the removal of big reciprocal tariffs on virtually all U.S. trading partners, as well as an airstrike on Iran earlier this month which has produced no counter attacks on the U.S.
Report Card for 1H25
We mentioned it was a turbulent first half of the year, but we are closing strong. The Nasdaq rides a 5-day winning streak and is +17.2% in Q2 — its best performance since Q2 2020 — while the S&P 500 is up 4 of 5 sessions. The Dow remains -2.7% from fresh all-time highs. Currently. the Dow is up another +230 points, the S&P 500 +20 and the Nasdaq +120 points.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Wall Street Set to Close Strong a Turbulent 1H 2025

Monday, June 30, 2025
It’s the final day of the first half of 2025, and market indexes are once again at all-time highs on the S&P 500 and Nasdaq, closing-in on the Dow and small-cap Russell 2000. We’re also roughly +20% from near-term lows, in early April of this year. In short, it’s been quite a rollercoaster ride for investors.
We are light on economic prints today, but not for the week: despite a shortened trading week in observance of Independence Day on the 4th of July Friday, this is Jobs Week: including a new Job Openings and Labor Turnover Survey (JOLTS) tomorrow, private-sector payrolls from Automatic Data Processing ADP on Wednesday, and the U.S. Employment Report on Thursday, joining normal Thursday Weekly Jobless Claims.
Among the most important number we’ll be checking closely are the ADP figures, which came in at their lowest levels in more than two years at +37K, with negative monthly tallies of -17K in Professional/Business Services, -13K in Education/Healthcare and Trade/Transportation/Utilities -4K. Also, Continuing Jobless Claims last week came in at their highest level in 3 1/2 years, closing in on 2 million longer-term jobless claims for week.
Expected Reports This Week Aside from Jobs
This week, we’ll also see the final print on U.S. Manufacturing and Services PMI from S&P and ISM. In addition, Construction spending, Factory Orders and Auto Sales will also hit the tape. And this is before mentioning that the one of the most consequential tax bills in U.S. history is in the process of making its way to President Trump’s desk for signing on July 4th.
After today’s open, we’ll see a new Chicago Business Barometer (PMI) for June. It is expected to crank up to 43.0 from 40.5 reported last month. This would be consistent with business outlooks improving, partly on the removal of big reciprocal tariffs on virtually all U.S. trading partners, as well as an airstrike on Iran earlier this month which has produced no counter attacks on the U.S.
Report Card for 1H25
We mentioned it was a turbulent first half of the year, but we are closing strong. The Nasdaq rides a 5-day winning streak and is +17.2% in Q2 — its best performance since Q2 2020 — while the S&P 500 is up 4 of 5 sessions. The Dow remains -2.7% from fresh all-time highs. Currently. the Dow is up another +230 points, the S&P 500 +20 and the Nasdaq +120 points.
Questions or comments about this article and/or author? Click here>>
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Through 1H 2025, U.S. Economy Threads the Needle

Bumble Inc. BMBL shares ended the last trading session 25.1% higher at $6.52. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 12.7% loss over the past four weeks.
BMBL is benefiting from enhanced user experience through new features, AI-driven personalized matching, and strong growth in its Bumble BFF friendship platform.
This company is expected to post quarterly earnings of $0.29 per share in its upcoming report, which represents a year-over-year change of +31.8%. Revenues are expected to be $240.01 million, down 10.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Bumble, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on BMBL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Bumble belongs to the Zacks Internet - Software industry. Another stock from the same industry, Automatic Data Processing ADP, closed the last trading session 4.2% lower at $298.19. Over the past month, ADP has returned -4.4%.
ADP's consensus EPS estimate for the upcoming report has changed +0.1% over the past month to $2.22. Compared to the company's year-ago EPS, this represents a change of +6.2%. ADP currently boasts a Zacks Rank of #3 (Hold).
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Bumble (BMBL) Soars 25.1%: Is Further Upside Left in the Stock?

Investors in Automatic Data Processing Inc. (Symbol: ADP) saw new options become available today, for the August 8th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the ADP options chain for the new August 8th contracts and identified one put and one call contract of particular interest.
The put contract at the $295.00 strike price has a current bid of $5.50. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $295.00, but will also collect the premium, putting the cost basis of the shares at $289.50 (before broker commissions). To an investor already interested in purchasing shares of ADP, that could represent an attractive alternative to paying $297.69/share today.
Because the $295.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 57%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.86% return on the cash commitment, or 15.83% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Automatic Data Processing Inc., and highlighting in green where the $295.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $300.00 strike price has a current bid of $7.00. If an investor was to purchase shares of ADP stock at the current price level of $297.69/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $300.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.13% if the stock gets called away at the August 8th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if ADP shares really soar, which is why looking at the trailing twelve month trading history for Automatic Data Processing Inc., as well as studying the business fundamentals becomes important. Below is a chart showing ADP's trailing twelve month trading history, with the $300.00 strike highlighted in red:
Considering the fact that the $300.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 51%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.35% boost of extra return to the investor, or 19.96% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example is 22%, while the implied volatility in the call contract example is 23%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 250 trading day closing values as well as today's price of $297.69) to be 19%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
George Soros Stock Picks
CHEF Videos
ETFs Holding GILD
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.