Some stocks are easy winners thanks to their status as household names. Everybody knows Apple (NASDAQ:AAPL) or Microsoft (NASDAQ:MSFT), and probably has at least one of their products in their household as well. Some companies aren't quite so well known but represent incredible opportunities in their markets. One such company is Fiserv (NASDAQ:FISV), a global provider of financial services technology, whose recent numbers and analysis around it suggest that it's a company poised for some terrific gains to come.
The Analysts, Enamored
We recently brought some research together on the analyst perspective of Fiserv, and it came up downright golden. With 32 research firms currently covering Fiserv, 22 have a buy rating established therein. The remainder reporting is still good news for Fiserv; yes, one has a sell rating, but seven have a hold rating, and one even has a strong buy rating on the company. The most recent company to start running coverage on Fiserv, Mizuho, started in with a buy rating and a price target of $145.00. That alone is a big deal, as it represents roughly a $42 premium over what the stock closed at last night, $103.13.
Royal Bank of Canada, meanwhile, gave similar upticks back in May, as it bumped up its rating to “outperform” and offered an increased price target from $113 to $132 a share, either of which represents a fairly impressive premium in its own right. Given that the stock closed September 1 at $99.11, it's been seeing some impressive gains in the interim. If the analyst views hold true, then there could be quite a bit of room left to run still.
It gets better; beyond our own research, reports note that, while Fiserv may not be among the 30 most popular stocks for hedge funds, it's still a welcome guest. Fiserv is in 85 hedge fund portfolios right now, reports note, and that's up from its previous all-time high of 80. At the end of the previous quarter, those same reports note that Fiserv was only part of 67 hedge funds, which proves that this company's winning a lot of friends in the hedge fund space.
Right Place, Right Time
There's certainly a lot of positive outlook out there already for Fiserv, but what's giving all these positive stances their basis? Analysts don't just come out and express love for a stock without having something behind it, and for Fiserv, a lot of the connection to optimism seems to stem from market conditions.
For instance, Fiserv recently rolled out its new connection to Amazon (NASDAQ:AMZN) and its Alexa system. Known as the “Alexa, pay for gas” technology, the system will confirm the station location and pump number, then activate the pump. All the driver need do then is get out, pump the relevant gas, and then drive away, because Alexa paid the bill from a relevant credit or debit card. While it's not universally available—only 13,500 gas stations can take it at last report, and users will need an Alexa-enabled vehicle or similar portable Alexa device to do the job—it's still a big step forward in mobile payments at gas stations.
Fiserv is also a part of the rapidly-growing tokenization market, in which sensitive data—especially payment details—are turned into non-sensitive data, or tokens, that let transactions go through while any potential hackers get little for their efforts. The tokenization market is expected, reports note, to approach $4.5 billion in value just by 2026, a compound annual growth rate (CAGR) of 22.45%, and Fiserv will have a piece of that action. Tokenization also plays a part in cryptocurrency issues, which gives it another advantage.
A Welcome New Help in a Socially-Distanced Time
Fiserv's advancements come at a particularly useful time. While coronavirus fears and a nationwide coin shortage deliver their own brand of damage to our economy, mobile payments technology steps in to fill the gap. Even if these things weren't events already in progress, they'd likely still be welcome from a convenience standpoint; I don't know how many winters I've personally shivered myself half-apart filling a gas tank then going in to pay then going back to my car. Cutting the part after “filling a gas tank” from the equation would be welcome, and if it's as easy as “Alexa, pay for gas,” that's hard to pass up.
Fiserv has a lot going for it right now, and while the coin shortage and the coronavirus may only—hopefully!—be temporary, the convenience will still be there, and Fiserv will be leading the way. It's small wonder that the market likes this stock, and it should be a tempting target for you too.
Companies Mentioned in This Article
Compare These Stocks
Add These Stocks to My Watchlist
15 Healthcare Stocks that Analysts Love
There are more than 200 healthcare companies traded on public markets. Given the sheer number of pharmaceutical companies, medical research firms, hospital systems, and other healthcare stocks, it can be hard to identify which healthcare companies will outperform the market.
Fortunately, Wall Street's brightest minds have already done this for us. Every year, analysts issue approximately 3,000 distinct recommendations for healthcare companies. Analysts don't always get their "buy" ratings right, but it's worth taking a hard look when several analysts from different brokerages and research firms are giving "strong-buy" and "buy" ratings to the same healthcare stock.
This slide show lists the 15 healthcare companies with the highest average analyst recommendations from Wall Street's equities research analysts over the last 12 months.
View the "15 Healthcare Stocks that Analysts Love".