), a $22 billion market-cap issue. Rising employment and increased stock trading spell good news for ADP, which gets two-thirds, or $4.5 billion, of its annual revenues processing payrolls, paying employment taxes, and handling benefits for 460,000 employers around the world. A further $1.4 billion comes from bookkeeping securities trades and accounts. Even though the outlook for both businesses is perking up, the stock is down 5% for the year, to 37. Ferenbach says he started buying the stock in September, believing it would go to 50. Standard & Poor's recently upgraded it from "hold" to "buy." The shares trade at 24 times management's projected earnings of $1.50 to $1.60 for the fiscal year ending in June. But Ferenbach points out that the company estimates are overly conservative -- assuming no improvement in the economy. The shares are backed by a steady client base and a balance sheet with $2 billion in cash, notes S&P.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them. By David Henry