Gables Capital Management Cuts Stake in Automatic Data Processing

Gables Capital Management Inc. has reduced its investment in Automatic Data Processing, Inc. (NASDAQ: ADP) by 10.5% during the second quarter of 2023. The firm now holds 855 shares of the business services provider, following the sale of 100 shares within the quarter. At the close of this period, Gables Capital Management’s stake in Automatic Data Processing was valued at approximately $264,000.

Several other institutional investors have made significant adjustments to their holdings in Automatic Data Processing recently. Activest Wealth Management notably increased its stake by 2,600.0% during the first quarter, acquiring 81 shares valued at $25,000 after buying an additional 78 shares. Harbor Asset Planning Inc. and Mid American Wealth Advisory Group Inc. each purchased new stakes in Automatic Data Processing during the second quarter, with investments of about $26,000. Clarity Asset Management Inc. and von Borstel & Associates Inc. also joined the ranks of investors, acquiring stakes worth approximately $29,000 and $30,000, respectively. Currently, approximately 80.03% of the company’s stock is held by hedge funds and institutional investors.

Insider Transactions and Stock Performance

In related news, Automatic Data Processing’s Vice President, David Foskett, sold 1,373 shares on September 3, 2023, at an average price of $296.57, amounting to a total value of $407,190.61. Following this transaction, Foskett now owns 11,781 shares, valued at approximately $3,493,891.17, which reflects a decrease of 10.44% in his position. Another Vice President, Joseph Desilva, sold 4,614 shares on the same day, generating proceeds of $1,368,373.98 and reducing his ownership by 20.83% to 17,536 shares.

Over the last 90 days, insiders have sold a total of 52,516 shares valued at $15,632,410, with corporate insiders currently holding 0.20% of the total stock.

Analysts have noted that Automatic Data Processing opened at $283.98 on Wednesday, with a market capitalization of $115.04 billion. The stock has a price-to-earnings (P/E) ratio of 28.45 and a beta of 0.82. Over the past year, the stock has varied between a low of $272.62 and a high of $329.93.

Financial Performance and Dividend Announcement

Automatic Data Processing recently reported its quarterly earnings, posting $2.26 earnings per share for the quarter ending on July 30, 2023. This result surpassed analysts’ consensus estimates of $2.23 by $0.03. The company’s revenue for the quarter was $5.13 billion, exceeding expectations of $5.05 billion. The data indicates a year-over-year revenue increase of 6.3% compared to the same quarter last year, when the company reported earnings of $2.09 per share.

For the fiscal year 2026, Automatic Data Processing has set guidance at $10.811-11.011 earnings per share, while analysts predict an average of $9.93 earnings per share for the current fiscal year.

The company has also declared a quarterly dividend of $1.54, which was paid on October 1, 2023, to shareholders of record as of September 12, 2023. This annualizes to $6.16, representing a yield of 2.2%. The dividend payout ratio is currently reported at 61.72%.

Automatic Data Processing, Inc. provides cloud-based human capital management solutions across the globe, operating within two segments: Employer Services and Professional Employer Organization (PEO). The Employer Services segment offers comprehensive HR outsourcing solutions along with strategic cloud-based platforms.

Investors and analysts will be keenly watching how Automatic Data Processing continues to perform amidst these changes and what further steps it may take in the evolving market landscape.