Automatic Data Processing, Inc. (NASDAQ/ADP) is one of those blue chips that have a good thing going with their private sector U.S. jobs reports. The stock market moves on the news, and so does Automatic Data Processing (ADP). According to ADP’s National Employment Report, the nonfarm private sector added 162,000 jobs from August to September on a seasonally adjusted basis. Manufacturing added 4,000 new jobs, while construction added 10,000, the strongest showing since March (which had a boost in construction jobs due to mild winter weather). The financial services sector added 7,000 jobs in September, representing the 14th consecutive monthly gain. The vast majority of new employment growth was from small and medium-sized businesses.
ADP is another one of those blue chips that is trading right at its 52-week high on the stock market and boasts a current dividend yield of just under three percent. The stock is about nine points away from its all-time high set in September of 2000 and has done well since the financial crisis of 2008/2009 on consistently lower trading volume. ADP’s stock chart is featured below:
Chart courtesy of www.StockCharts.com
ADP belongs to the NASDAQ-100 Index, which is full of many stock market blue chips, both domestic and international, which are non-financial companies trading on the NASDAQ. Weighted by market capitalization, this index has significantly outperformed all other blue chip averages, including the Dow Jones Industrials, S&P 500, and even the NASDAQ Composite over the last several years.
It’s no wonder this stock market index has outperformed; it’s full of all kinds of growth companies and blue chips that have appreciated tremendously. Below is the stock chart for Alexion Pharmaceuticals, Inc. (NASDAQ/ALXN), which is a favorite of mine. This one-drug powerhouse wealth-creator has been going virtually straight up on the stock market since 2010.
Chart courtesy of www.StockCharts.com
Other brand-name blue chips that are in the NASDAQ-100 and hitting new highs on the stock market include Whole Foods Market, Inc. (NASDAQ/WFM), Mattel, Inc. (NASDAQ/MAT), Google Inc. (NASDAQ/GOOG), Apple Inc. (NASDAQ/AAPL) and DIRECTV (NASDAQ/DTV). The weighting by market capitalization is the key here, as some of the stock market’s biggest companies are helping the index outperform.
Mitchell Clark is a senior editor at Lombardi Financial, specializing in large- and micro-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, including Micro-Cap Reporter, Income for Life, Biotech Breakthrough Stock Report, and 100% Letter. Mitchell has been with Lombardi Financial for 17 years. He won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was a stockbroker for a large investment bank. In the... Read Full Bio »
Forecasts Aug. 29, 2015
Immediate term outlook:
The bear market rally in stocks that started in March 2009, extended because of unprecedented central bank money printing, is coming to an end. Gold bullion is up $1,000 an ounce since we first recommended it in 2002 and we are still bullish on the physical metal.
Short-to-medium term outlook:
World economies are entering their slowest growth period since 2009. The Chinese economy grew last year at its slowest pace in 24 years. Japan is in recession. The eurozone is in depression. With almost half the S&P 500 companies deriving revenue outside the U.S., slower world economic growth will negatively impact revenue and earnings growth of American companies. Domestically, America’s gross domestic product grew by only a meager 2.3% in the second quarter, which will negatively impact an already overpriced equity market.
Estimates Aug. 29, 2015
Trailing 12-month EPS for Dow Jones companies (Most Recent Quarter)