“Stocks, like individuals, have character and personality. Some are high-strung, nervous, and jumpy; others are forthright, direct, and logical.” – Jesse Livermore
One of the great investors of the 20th century, Livermore understood that personal opinions in the marketplace are pointless. The market has a way of proving the majority wrong, and even professionals seldom have their positioning aligned with the markets’ movements on a consistent basis. Livermore taught us that our opinions are secondary; it’s the action of the market itself that confirms our suspicions. Markets are never wrong – but opinions often are.
Stocks that are able to outperform the market over sustained periods of time illustrate to investors that they are worthy of a spot in our portfolio. It’s even more impressive when those stocks are able to weather bear markets and continue rising through the volatility. Their ability to navigate the noise and retain buying pressure while most stocks fall is what separates them from the herd.
That’s exactly what we have in the stock we will analyze below. This company checks off all the boxes, including strong sales and earnings growth, a robust technical trend, and the backing of a leading industry group.
The Zacks Consulting Services industry is currently ranked in the top 13% out of more than 250 industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months. Quantitative research studies have shown that roughly half of a stock’s price movement can be attributed to its industry group. By targeting stocks in top industries, we can dramatically improve our odds of success.
Let’s take a look at a long-term leader within this industry.
FTI Consulting, Inc. (FCN)
FTI Consulting provides business advisory services globally. The company helps manage changing environments, mitigate risk, and resolve disputes. FCN supports its clients in corporate restructuring, data and analytics, and litigation assistance such as antitrust and competition services. The consulting company serves a variety of industries such as aerospace and defense, agricultural, airline, automotive, energy, finance, real estate, and healthcare. FTI Consulting was founded in 1982 and is based in Washington, District of Columbia.
A Zacks Rank #2 (Buy) stock, FCN has exceeded earnings estimates in each of the past eight quarters. The company most recently delivered Q1 EPS back in April of $1.66, a 24.81% surprise over the $1.33 consensus estimate. FCN has posted a trailing four-quarter average earnings surprise of 24.4%, aiding the stock’s 30.48% return in the past year. Shares have advanced 15.2% this year alone while the major indexes have been in a bear market.
And that’s not all. FCN has shown its capability to outperform over time. As we can see below, the company has returned over 4,000% since its IPO, handily outperforming the S&P 500. This illustrates management’s ability to adapt to the ever-changing market dynamics.
Image Source: StockCharts
Analysts have raised their full-year earnings projections by 0.88% in the past 60 days. The Zacks Consensus EPS Estimate is now $6.87/share, reflecting growth of 1.63% versus last year. Earnings are expected to pick up in 2023, in which analysts anticipate a 22.13% EPS growth rate to $8.39 per share.
Make sure to add FCN to your watchlist if you haven’t already done so.
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