BUSINESSWEEK ONLINE : AUGUST 28, 2000 ISSUE
BUSINESSWEEK INVESTOR -- INSIDE WALL STREET One Tech Stock That's a Safe Haven Automatic Data Processing is one low-riskhigh tech. With tech stocks coming under pressure, investors are scouring the landscape for low-risk winners. Enter Automatic Data Processing (AUD), the No. 1 independent computing service company, whose stock has recovered from the spring decline. Trading at 55 in mid-March, the stock dropped to 46 in early April. It has rallied since, closing at 54 9/16 on Aug. 9. AUD is a ''safe-haven tech investment,'' says Jennifer King of Merrill Lynch--''somewhat contra-cyclical to higher-beta (risk) tech stocks.'' It has, she adds, a ''spectacularly consistent record of over 35 years of quarterly double-digit earnings gains.'' A leader in payroll and human-resource transaction processing, AUD has a ''proven, solid recurring-revenue business model,'' says King. Also impressive, she adds, are AUD's Internet and e-business initiatives. AUD has formed alliances with America Online and Microsoft--and soon with EarthLink--to enable small-business customers to use AUD's services on the Web. Yahoo! is expected to sign up, too. Some 57% of AUD's $6 billion in sales are to employers, including payroll processing. The rest comes from processing trades for brokerages (24%) and providing software and communications to 18,000 car dealers (12%). AUD President Gary Butler says the company's Internet alliances will boost the company's global customer base, now 450,000. Merrill's King figures AUD earned $1.31 a share in the year ended June 30, 2000. She expects $1.51 in 2001. By GENE G. MARCIAL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS One Tech Stock That's a Safe Haven CHART: Quick Rebound from a Spring Dip INTERACT E-Mail to Business Week Online

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