For those looking to find strong Business Services stocks, it is prudent to search for companies in the group that are outperforming their peers. Korn/Ferry (KFY) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Business Services peers, we might be able to answer that question.
Korn/Ferry is one of 234 individual stocks in the Business Services sector. Collectively, these companies sit at #7 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Korn/Ferry is currently sporting a Zacks Rank of #2 (Buy).
Over the past three months, the Zacks Consensus Estimate for KFY's full-year earnings has moved 0.9% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
Based on the most recent data, KFY has returned 6.9% so far this year. Meanwhile, the Business Services sector has returned an average of -12.4% on a year-to-date basis. This means that Korn/Ferry is performing better than its sector in terms of year-to-date returns.
Another stock in the Business Services sector, Priority Technology (PRTH), has outperformed the sector so far this year. The stock's year-to-date return is 28.6%.
In Priority Technology's case, the consensus EPS estimate for the current year increased 6% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).
To break things down more, Korn/Ferry belongs to the Staffing Firms industry, a group that includes 14 individual companies and currently sits at #211 in the Zacks Industry Rank. On average, stocks in this group have gained 16.1% this year, meaning that KFY is slightly underperforming its industry in terms of year-to-date returns.
Priority Technology, however, belongs to the Technology Services industry. Currently, this 112-stock industry is ranked #157. The industry has moved -5.6% so far this year.
Investors interested in the Business Services sector may want to keep a close eye on Korn/Ferry and Priority Technology as they attempt to continue their solid performance.
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This article originally published on Zacks Investment Research (zacks.com).