Press Release: October's Small Business Hiring Data Continues To Show Weakness

Financial stocks advanced in Friday afternoon trading, with the NYSE Financial Index and the Financial Select Sector SPDR Fund (XLF) each rising 0.4%.

The Philadelphia Housing Index shed 0.1%, and the Real Estate Select Sector SPDR Fund (XLRE) lost 1%.

Bitcoin (BTC/USD) dropped 1.4% to $69,693, and the yield for 10-year US Treasuries rose 7.5 basis points to 4.36%.

In economic news, the Bureau of Labor Statistics reported nonfarm payrolls climbed 12,000 in October. The consensus was for a 100,000 increase in a survey compiled by Bloomberg.

In corporate news, Mid Penn Bancorp agreed to buy William Penn Bancorporation for $127 million in stock. Mid Penn shares dropped 3.8%, and William Penn shares fell 3.7%.

Simon Property Group shares were falling nearly 1% after it reported Q3 funds from operations Friday of $2.84 per diluted share, down from $3.20 a year earlier. Analysts polled by Capital IQ expected $3.03.

CBIZ shares rose past 1% after the company said Friday it has closed the $2.3 billion cash-and-stock acquisition of the non-attest business of Marcum.

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all.

That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.

However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks.

CBIZ (CBZ) is on the list of such stocks currently recommended by our proprietary system. In addition to a favorable Growth Score, it carries a top Zacks Rank.

Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Here are three of the most important factors that make the stock of this provider of outsourced business services a great growth pick right now.

Earnings Growth

Arguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.

While the historical EPS growth rate for CBIZ is 17.9%, investors should actually focus on the projected growth. The company's EPS is expected to grow 10% this year, crushing the industry average, which calls for EPS growth of 9.2%.

Cash Flow Growth

While cash is the lifeblood of any business, higher-than-average cash flow growth is more important and beneficial for growth-oriented companies than for mature companies. That's because, growth in cash flow enables these companies to expand their businesses without depending on expensive outside funds.

Right now, year-over-year cash flow growth for CBIZ is 9.6%, which is higher than many of its peers. In fact, the rate compares to the industry average of 3.2%.

While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 13.2% over the past 3-5 years versus the industry average of 11.2%.

Promising Earnings Estimate Revisions

Superiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

There have been upward revisions in current-year earnings estimates for CBIZ. The Zacks Consensus Estimate for the current year has surged 0.4% over the past month.

Bottom Line

CBIZ has not only earned a Growth Score of A based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #2 because of the positive earnings estimate revisions.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

This combination indicates that CBIZ is a potential outperformer and a solid choice for growth investors.

Zacks Investment Research