Credit Suisse downgraded Automatic Data Processing (ADP) on Wednesday morning. Here’s what the move means for mutual fund investors.
Inside the Analyst Move
Credit Suisse downgraded ADP from “Outperform” to “Neutral” on a valuation call. The firm has also given the company an $82 price target, suggesting that the stock will remain flat.
Overvalued Stock Despite Better Unemployment Numbers
ADP is currently trading around 27x 2015 earnings estimates, which is very expensive despite the improvement in unemployment numbers. Fund managers and investors may be keeping a close eye on this stock, but may not be chasing it at current levels.
Mutual Funds to Watch
Investors interested in ADP may be interested in the funds listed below. These funds currently hold the largest stakes in the company.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| VTSMX | Vanguard Total Stock Market Index | 1.66% |
| VDIGX | Vanguard Dividend Growth | 1.51% |
| VFINX | Vanguard 500 Index | 1.07% |
The Bottom Line
The funds above offer investors exposure to a diverse group of securities and industries. Investors interested in ADP may also be interested in Paychex (PAYX) and TriNet (TNET).