Financial profit with less risk

Article Excerpt

Broadridge is unique in the financial sector. For over 40 years, the company has built up its investor-communications business and now dominates this niche industry. Its securities-clearing division makes short-term loans to brokers, which exposes it to some credit risk. But these loans are safer than subprime mortgages or credit-card debt. The company should also continue to profit as more banks and brokers look to outsource their routine transaction-processing tasks to save money. Moreover, it gains from the ongoing drop in computer costs. The stock fell from $24 in late 2007 to a low of $9.21 last November, during the financial crisis. It has now recouped most of last year’s share-price decline. We feel it has more gains ahead. BROADRIDGE FINANCIAL SOLUTIONS INC. $20 (New York symbol BR; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 139.3 million; Market cap: $2.8 billion; Price-to-sales ratio: 1.3; WSSF Rating: Extra Risk) provides communication, processing and other back-office services to the investment industry. By outsourcing these…

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