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CandidMarkets is about finding investments that deliver returns through dependable growth, not swings in investor sentiment. Its iPad app is the most robust, easiest to use tool to value stocks and pick investments that deliver returns with reduced risk. Download our app here:... More
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Investments You Don't Need to Look at Every Day
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  • JKHY - An Investment You Don't Have To Look At Every Day?

    Jack Henry & Associates, a leader in providing information processing solutions for banks, has seen more hedge funds buying into it of late.

    With a very consistent ROE of 16-18% and annually earnings growth exceeding 14% with the exception of 2008-09, I expect the stock to return in excess of 8% annually, with more upside if it maintains earnings growth into the future. My model assumes a conservative 12.5% earnings growth and future P/E of 18.5x. With these assumptions, the stock is fairly valued now with current and near-term earnings growth accounting for over 70% of current share value.

    If JKHR continues to maintain a higher P/E ratio above 18.5x, which I believe is reasonable, this stock will return in excess of 8% annually and will continue to see its stock value appreciate above its ~$45 valuation. I expect minimal downside to this stock given the conservative assumptions I have taken for future P/E ratio and earnings growth.

    Download the CandidMarkets iPad app to find other investments you don't have to look at every day! http://goo.gl/xCQDX

    Fair Value Estimate

    Estimated Future Annualized Returns

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: JKHY
    Apr 09 10:01 AM | Link | Comment!
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