Automatic Data Processing (ADP), Paychex, Inc. (PAYX): Looking Beyond Friday’s Employment Figures

Associated Banc Corp (NASDAQ:ASBC), from the October 2012 feature, managed to deliver on its early promise and pushed a new multi-year high. This brought with it an injection of volume buying. Earnings are due on July 18, but for the last quarter the bank earned $0.27 per share, up 12.5% from the comparable quarter last year. Deposits were also up 3% to $17.4 billion. Non-interest income was up $4 million to $82 million for the quarter, driven by its mortgage banking.  However, there was implicit mention of a slowdown in loan growth near quarter end, although it wasn’t expected to impinge on guidance given for the upcoming quarter. At a big picture level, a rise in mortgage business is good news for consumer confidence (and employment figures) as it suggests a rise in the long term employed. Finally, its once-troubled loan business continues to improve fall: the amount of bad loans is now at $341 million from $361 million the previous quarter (and $699 million from the prior year).

Summary

Friday’s job figures will leave traders edgy, and likely edging on caution with the announcement buffered by the July 4th holiday and the weekend. There is probably more room for a “disappointment” in the figures: Paychex, Inc. (NASDAQ:PAYX)’s weaker earnings would be bad news for those looking for an improvement in these figures. However, Associated Banc Corp (NASDAQ:ASBC)’s increased mortgage business does point to a rise in long term hires, confirming the general fall in unemployment.

Irrespective of the employment figure, Automatic Data Processing (NASDAQ:ADP), Ambarella and Associate Banc-Corp are trading at, or close to, new multi-year highs. All three stocks have been relatively immune to the broader sell-off from May’s highs, and all three have seen stronger volume on up days over down ones; important characteristics for market leaders. Look for this strength to continue.

The article Looking Beyond Friday’s Employment Figures originally appeared on Fool.com.

Declan Fallon has no position in any stocks mentioned. The Motley Fool recommends Automatic Data Processing and Paychex. Declan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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