By Matt McCallMar 29, 2018
The first quarter has been a roller coaster for the market, with the broad indices suffering two corrections after having gone nearly two years without a pullback of 10%. The S&P 500 is down about 2% so far this year, but I’m pleased to report that my pick in the Best Stocks for 2018 contest has bucked the overall trend.
Broadridge Financial (BR), through its technology, provides investor communications and other solutions to the financial sector. It’s one of the pioneers in its industry and stands to benefit greatly as blockchain – the technology behind bitcoin – changes the way financial business is conducted.
This $12.65 billion company has emerged as a standout name in this budding trend, completing a successful pilot test of a blockchain-based technology in the repurchase agreement market in collaboration with two large European banks last year. Now, it’s working on developing blockchain-based applications for Asia-Pacific markets.
The upside for this once slow-growth business has increased dramatically with the introduction of blockchain to its model. And considering the technology increases efficiency, the speed of transactions, overall transparency and cost savings, there aren’t many financial firms that shy away from it. Given that BR is already a well-established player in its sector, blockchain was an easy sell to its current clients.
As I mentioned, the first quarter was a tough one across the board, but I was thrilled to see how well Broadridge held up amid the volatility. The stock did get hit a bit during the first correction – briefly dipping below its 50-day moving average (the blue line) – but bounced back quickly.
BR is up nearly 20% here in the first quarter and currently consolidating just above $105 (the black line). But even with that strong performance, I continue to see plenty of upside potential.
Interest rates on the rise is a boost for the banks and other financial stocks, and that increased buying heading into the latter half of the year will likely spill over to BR and keep pushing it to historic highs. We are here to ride that trend higher.
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