My pick for the Best Stocks for 2014 contest continues to perform well. I would have expected the stock to move higher than 13.7%, but FleetCor Technologies (FLT) has run into a few problems along the way.
FleetCor has seen poor results from its Russian operations and the cold weather earlier this year didn’t help much either as corporate travel slowed dramatically. In spite of all that, FleetCor has seen profits rise more than 30% so far in 2014.
Although best known for its fuel card business, FleetCor also has operations that offer corporate lodging discount cards. FleetCor has expanded into the trucking business and, in August, further diversified its portfolio by agreeing to acquire business-to-business e-payments company Comdata. Canada-based Comdata processes more than $54 billion in payments and has a customer base of 20,000 businesses.
When Comdata CEO Ron Clarke announced the deal in an August press release, he stated, “Comdata’s virtual payments business will add a completely new growth leg to FleetCor. We believe that the combination will result in significant synergies as we implement our operating disciplines to their portfolio of businesses.” The deal is expected to be accretive to earnings right away and could add as much as 60 cents per share to 2015 earnings.
In the second quarter, FleetCor saw revenues grow 26% year over year while earnings rose 28%. FleetCor also raised its guidance for the year to $5.04 and $5.10 up from $4.97 and $5.07. CFO Eric Dey told investors, “We have reported another strong quarter and are again raising our financial guidance for 2014. We are now expecting a 22% growth in revenue and 25% adjusted net income per share growth rate, at the midpoint of our guidance range, versus 2013.” I expect to see yet another positive earnings surprise when FleetCor reports results on Oct. 30.
In the past decade, FleetCor has made more than 60 acquisitions that have helped grow its payments business in the U.S. and around the world. FleetCor has said that it plans to focus more of its energy on emerging markets and repeat the process that’s working in U.S. and Europe. Right now 49% of the business is outside the U.S., and FleetCor thinks that will growing as it has seen tremendous opportunities for the fuel card and payments business around the world.
I think FleetCor stock will really shine in the fourth quarter and well into 2015.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
