WEX (NYSE: WEX) isn’t the kind of company that you find splayed out in the pages of most investment letters or financial publications. It’s one of those “boring” stocks that operates in an industry that doesn’t get much attention.
But if 62% return in 12 months, or a 33% return year to date for an industry leading company with a $8 billion market cap sounds like your idea of an exciting investment, well, WEX is your stock.
The company was started in 1983 in South Portland, Maine, as Wright Express. Initially it started as an issuer of fleet cards to the commercial and government car and trucking fleets. Now, its business has expanded into the healthcare and travel sectors as well.
While this may seem like a pretty straightforward business with a business cycle that rises and falls with the fortunes of the economy, that isn’t where WEX stock finds itself today.
The Business of WEX Stock
The fleet card business is pretty straightforward. Say you are a business — whether you’re a trucking firm, a furniture store or an electric utility — that has a fleet or fleets of vehicles. Maybe it’s to move other people’s products, or deliver your merchandise, or get your people around their territory.
Regardless, those vehicles need gas and also need maintenance. Instead of having each driver use their own money to make their runs and then reimburse them all — a bookkeeping nightmare — the business owner gets a fleet card it hands out to its drivers.
The fleet card pays for gas, maintenance or whatever else each owner decides the cards can be used for while the workers are on the clock.
WEX stock has become a significant player in this space, which means it has also developed significant skills in payment processing and information management solutions. This has helped WEX transition its fleet business into other sectors like healthcare and travel services.
So, now you have a company that operates in the trucking business which is exploding because of the rise in e-commerce and same-day delivery services. It operates in the rock-solid and expanding healthcare sector. And it’s also a key player in the global expansion of the travel industry through online travel agencies (OTAs).
In the latter category for example, WEX works with HitchHiker, Expedia (NASDAQ:EXPE) and Priceline (NASDAQ:BKNG) as well as others. These are some of the biggest names and most important brands in global travel.
Its healthcare division helps manage payments through HSAs, HRAs, COBRA, FSAs and various other plans between healthcare providers and the companies that manage these plans. Clients include Fifth Third Bancorp (NASDAQ:FITB), Paychex (NASDAQ:PAYX) and HSA Bank.
And then you have the original logistics division which is seeing a complete shift and expansion in its model. The fact is, for a “boring” company, WEX stock is pretty darned sexy.
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.
