Zacks Top 10 Stocks For 2019 1

2019 Annual Issue
Buy them.
Hold them.
Beat the market.
Contents
Overview 3
Stock Selection Process 5
Stock Previews 7
Research Reports 24
Frequently Asked Questions 54
Contact Us 56
2019 Annual Issue 2

Overview
Stocks were all over the place in 2018 – up, down and sideways - but ended the year in
negative territory. Unlike the major stock market indexes, the Top 10 Stocks for 2018 port-
folio was strong throughout the year. Through December 19th, it returned +12.89% vs. the
-8.2% decline for the S&P 500 index in that time period (including dividends). We have de-
signed the Top 10 Stocks for 2019 to replicate this outperformance in the New Year as well.
I don’t expect any material improvement in the market’s performance in 2019, particularly
in the first half of the year. In a number of respects, the New Year will likely be no different
from 2018, with many of the issues that weighed on the market last year still in play. These
issues include uncertainty about economic growth, global trade and the Fed.
With respect to the U.S. economy, we are not onboard with the overly bearish narrative
taking hold in the market. That said, we do expect the U.S. economy’s growth pace to de-
celerate from the 2018 pace as the effects of the fiscal stimulus wane. Beyond the U.S., the
outlook for the global economy has weakened as well, with the growth pace in Europe,
China and elsewhere steadily decelerating. The recent pullback in oil prices is more a re-
flection of demand uncertainty (a function of weakening global economic growth), than
the generally accepted U.S. Shale-driven supply overhang.
This economic uncertainty is at the core of the market’s Fed worries as well, with mar-
ket participants concerned that the central bank may end up over-tightening monetary
policy if they don’t take into account the evolving economic picture. We don’t see this as
a major risk as the Fed has consistently proven itself correct in reading each turn in this
economic cycle. We see no reason to think that they will not refine their approach should
there be a need. It appears that we are a bit more sanguine about the Fed than the mar-
ket as a whole.
The Zacks Top 10 Stocks for 2019 plays this outlook through a blend of defense and the-
matic offense. Only 2 of the 10 stocks are large caps, with all the others in the small- to
mid-cap category. Six of the 10 stocks are dividend payers, but they are not purely de-
fensive picks and provide plenty of growth leverage. A majority of the stocks have low
betas, but that isn’t the sole reason why they entered the portfolio, as we explain in the
2019 Annual Issue 3

Overview continued ...
individual stock write-ups. Others like Vocera, HMS Holdings and Ubiquiti provide a mix
of defensive attributes and growth opportunities.
As you know, this portfolio has traditionally followed a year-long buy-and-hold strategy.
But we do retain the flexibility to make mid-course corrections in response to unforeseen
market conditions, as we did last year. If the macro framework turns out to be different
than what we expect or the outlook for an individual company turns negative, we will be
ready to make changes during the year.
Have a prosperous 2019,
Sheraz Mian
Director of Research,
Zacks Investment Research
2019 Annual Issue 4

Stock Selection Process
With the portfolio designed to follow a buy-and-hold

approach, we employ a rigorous stock-selection pro-
cess that combines a top-down outlook to the Zacks
Rank system.
Below we outline the rigorous 5-step process for se-

lecting stocks.
Step 1: Zacks Rank
There is no better rating scheme than the Zacks Rank. While Zacks #1 (Strong Buy) and
#2 (Buy) Rank stocks tend to warrant the most attention (and rightfully so), #3 (Hold)
stocks were also considered. As long as they met the rest of our criteria, #3s could
potentially garner a spot on the coveted Top 10 list. The Zacks Rank takes advantage
of changes in earnings estimates to help investors become more profitable over a 1-3
month time horizon.
For more information please refer to the Zacks Rank Guide.
Step 2: Zacks Industry Rank
Even the best company will underperform the market if it’s in an out-of-favor industry.
That is why we focus on stock picks from industries with the highest Zacks Industry
Rank. We also gave consideration to stocks in industries we think would come into
favor should the economy begin to show signs of a recovery.
Step 3: Value Analysis
Study after study proves that stocks with low valuations will outperform the market
over the long haul. We look at a variety of metrics to uncover the ‘diamonds in the
rough’, but our standard go-to metrics remains P/E and P/B.
2019 Annual Issue 5

Stock Selection Process continued ...
Step 4: Fundamentals & Management Effectiveness
Finally, we considered the fiscal health of the company, with a particular emphasis on
how effectively it is managed. Good management creates value for shareholders by
getting the most out of the company’s resources. We don’t just look for stocks with
‘return on equity’ (ROE) measures above their industry levels, but perform detailed
analyses of each company’s financial statements.
Step 5: Broker Sentiment
Is the company receiving upgrades or is it being hammered with downgrades? Stocks

that have been upgraded or have stable brokerage analyst ratings have proven to out-
perform the broader market over the years.
We also took the necessary steps to insure the portfolio of stocks was a group that
would work well together in any type of market environment. The stocks represent
many different attractive industries with what we believe is a great mixture of market
cap, growth and valuation attributes.
Our intent is to buy and hold these 10 stocks for the year. However, buy-and-hold does
not mean buy-and-forget. So, if the macro framework turns out to be different from
what we expect or the outlook for an individual company turns negative, we will stay
ready to make changes during the year. At that time we will immediately send out an
alert email informing our customers of the change. No stock will be removed because
of price performance. However, you may want to consider selling any stock that falls
more than 20%.
Lastly, a note on capital gains taxation. Selling stocks from the portfolio can result in
short-term gains for tax purposes. Investors with questions about the realization of
both short- and long-term gains are encouraged to contact a tax professional.
2019 Annual Issue 6

“From the Zacks Top 10 Stocks website, you will
Stock Previews always have access to the most recent reports.”
Vocera Communications, Inc. (Ticker: VCRA)

As the healthcare industry evolves with rapid strides in technology, clinical collaboration
across the care continuum has become all the more important for improving the overall
healthcare experience of patients and staff. Without the perfect blend of healthcare com-
munication tools, organizations often tend to operate in silos and struggle to provide
consistent, high-quality outcomes for the patients they serve.
This is where Vocera Communications comes into play by combining solutions that effec-
tively solve healthcare communication and workflow challenges to create an ideal heal-
ing and working environment.
Vocera is a $1.1 billion market cap provider of integrated communications solutions to the
healthcare industry. Installed in more than 1,700 facilities, including nearly 1,500 hospitals
and healthcare facilities, Vocera offers an all-inclusive digital platform for hands-free com-
munication via secure text messaging, alert and alarm management. Leveraging a pat-
ent-protected, enterprise-class server software, this integrated communications system
provides an advanced clinical rules engine that simultaneously unifies data from multiple
sources, prioritizes notifications and sends messages to the right care team members. This,
in turn, augments clinical workflows by enabling the interoperability of the solution with
a significant number of clinical and operational systems used in hospitals today.
Vocera found a spot in the Top 10 portfolio with its solid fundamentals, huge revenue-gen-
erating potential and leverage to several mega trends in the healthcare industry. These
include a relentless pursuit by healthcare facilities to improve workforce productivity and
reduce caregiver burnout; improvement in patient satisfaction; and enhancement of pa-
tient throughput to sustain margin levels as volume and payer mix continue to erode.
The key growth drivers are a healthy momentum in bookings and a strong pricing power
while its wide swath of integrations continues to be a major differentiator. These integra-
tions enable Vocera’s platform to be deeply embedded within the hospital ecosystem and
generate a recurring revenue stream. The software mix in revenues is gradually increas-
2019 Annual Issue 7

Stock Previews continued ...
ing, driven by both new customer shipments and cross-selling success.
Vocera is expected to report December-quarter results on February 14th. In its September-

quarter report, it handily beat estimates and guided higher, continuing its track record of
positive top- and bottom-line surprises. Full-year 2018 earnings are expected to improve
+57.6% year over year on solid traction from an ROI-based approach and a healthy sales
pipeline. Adjusted EBITDA margin is well on track to reach in excess of 20% in the next
two years (from about 18% in the third-quarter 2018), demonstrating the operating lever-
age in its business model.
We expect Vocera’s comprehensive portfolio to gain rapid adoption among hospitals and
healthcare facilities as they aim to reduce costs by enhancing workflows and improve
patient and staff satisfaction through secure, integrated and intelligent communication
solutions.
Vocera shares had a strong run in 2018, but the stars appear to be aligned for this im-
pressive healthcare technology firm and the momentum should continue this year and
beyond.
Research report on Vocera Communications, Inc. (VCRA)
Generac Holdings Inc. (Ticker: GNRC)

Generac Holdings designs, manufactures, and sells back-up power generators for the resi-
dential, commercial and industrial markets. This Waukesha, WI-based company made its
way into the Top 10 portfolio on the back of its attractive long-term growth drivers.
It enjoys a strong competitive position in the residential market in terms of distribution,

product development and product breadth. Generac has the largest market share in the
residential market and boasts the largest distribution network in the country. There is
plenty of room for growth in this core market since the penetration rate in the domestic
2019 Annual Issue 8

residential market is barely at 4%.
Awareness of back-up power generator capacity increases with large scale power disrup-
tions, particularly as a result of natural causes. With the nation’s electricity infrastructure
badly in need of upgrade, power failures have become a norm even as natural disasters
have seemingly become more frequent. The ageing population represents another tail-
wind as older homeowners tend to be more open to buy back-up generators. Growth in
the residential penetration rate has been the major driver lately, a trend that is expected
to continue going forward as well.
In the commercial and industrial (C&I) end market, which accounted for 37% of total rev-
enues in the latest quarter (residential accounted for 56% of the total), growth is coming
from market share gains. Growth in the international markets represents an additional
driver. The company’s C&I solutions are much in demand among telecom operators (par-
ticularly wireless carriers) as well as healthcare providers. The growing need for uninter-
rupted voice and data services, particularly during major events, has made it imperative
for telecom operators to build an emergency power backup infrastructure.
On the earnings front, Generac Holdings has an impressive track record, having beaten
top- and bottom-line estimates in the last four quarters. Estimates for the December quar-
ter have inched up since the third-quarter earnings release on Nov 1st. The current Zacks
Consensus EPS estimate of $1.39 on revenues of $551.9 million represent year-over-year
growth rates of +1.5% and +13.1%, respectively. For full year 2018, the company is on track
to earn $4.66 on revenues of $2 billion, up 37.1% and 19.8%, respectively.
Generac has an asset-light business model where it doesn’t have to perform capital inten-
sive manufacturing activities in-house. As a result, it generates very strong cash flows that
it actively returns to shareholders through buybacks (spent $26 million on buybacks in the
September quarter). The combination of these positive attributes coupled with a still-rea-
sonable valuation is expected to help the stock sustain its outperformance in 2019 as well.
Research report on Generac Holdings Inc. (GNRC)
2019 Annual Issue 9

Ubiquiti Networks, Inc. (Ticker: UBNT)

Bandwidth-intensive applications like video, audio, online gaming and social network-
ing have dramatically increased the need for faster and seamless connectivity. In order
to address these higher broadband access needs, wireless networks have emerged as an
attractive alternative to traditional wired networks as they require relatively lower capital
investments and operating costs.
New York, NY-based Ubiquiti Networks perfectly fits the bill with a comprehensive port-
folio of networking products and solutions that has grown the company to a market cap
of $7.7 billion and estimates for 2019 revenues of $1.06 billion. Its service-provider product
platforms provide carrier-class network infrastructure for fixed wireless broadband, wire-
less backhaul systems and routing. Its enterprise product platforms offer wireless LAN in-
frastructure, video surveillance products and machine-to-machine communication com-
ponents.
Backed by a rapidly growing and highly engaged community of service providers, dis-
tributors, value-added resellers, systems integrators and corporate IT professionals (re-
ferred to as the Ubiquiti Community), the company’s business model is highly flexible and
adaptable to market demands. Ubiquiti maintains a proprietary network communica-
tion platform that is committed to reducing operational costs by using a self-sustaining
mechanism for rapid product support and dissemination of information by leveraging the
strength of the Ubiquiti Community.
The Ubiquiti Community is a key source of competitive advantage for the company as it
enables it to drive rapid customer- and community-driven product development that ma-
terially bring down its development costs and time to market. Importantly, the Ubiquiti
Community allows the company to forego the need for maintaining a traditional direct
sales force as most of its competitors do. Ubiquiti’s inherent cost advantages in develop-
ment, sales, marketing and support costs enable it to offer innovative solutions at very
competitive prices.
2019 Annual Issue 10

This differentiated business model is a key reason why we picked Ubiquiti for the Top 10
portfolio and why we feel strongly about its growth opportunities in both emerging and
developed economies. These include a relentless pursuit by emerging countries to stay
connected with the world through adoption of wireless networking infrastructure as de-
veloped economies aim to bridge the demand-supply gap for higher bandwidth.
On the earnings front, Ubiquiti is scheduled to report December-quarter results on Febru-

ary 14th, with the company expected to report 94 cents in EPS on $253.4 million in rev-
enues, up +23.7% and +1%, respectively. The last quarterly release on November 9th was
the third quarter in a row of top- and bottom-line beats. Estimates have been steadily
going up, with the current fiscal year (fiscal year ends in June) EPS estimate of $4.12 up
almost +20% over the last two months.
Ubiquiti remains in excellent financial health, with an almost debt-free balance sheet and
$577 million in cash on hand. It generates significant amounts of cash flows and has mod-
est ongoing capex needs. This financial strength has prompted the company to reinstate
its dividend recently, which currently yields a decent 1%. All in all, we see Ubiquiti as a
quality long-term pick that offers attractive upside.
Research report on Ubiquiti Networks, Inc. (UBNT)
Intercontinental Exchange, Inc. (Ticker: ICE)

We see the Intercontinental Exchange as a play on steadily improving trading volumes
across all major asset classes on the back of growing market volatility. This leverage is
particularly notable given its ownership of the New York Stock Exchange (NYSE) and its
dominant standing in the traded energy futures space.
Trading volumes have generally been lackluster across the industry in recent years and
this was generally the trend in the first three quarters of 2018 as well. But increased mar-
ket volatility has pushed volumes in a meaningful way that will likely show up in the De-

cember-quarter results for ICE as well as other industry players.
A combination of synergy capture from acquisitions over the last few years and continued
share buybacks should help drive double-digit earnings growth even on modest top-line
gains. This Atlanta, GA based company operates 12 exchanges, seven clearing houses and
enjoys dominant positions in all major asset classes. ICE’s oil franchise is home to nearly
half of all global traded futures activity.
The NYSE platform, which it acquired in November 2015, makes it the preferred partner
for initial public offerings. In 2017, capital raised by NYSE was twice the amount raised by
the next largest exchange. The company has been the undisputed leader in raising capital
over the last 7 years.
ICE’s Data Services business, which provides a full suite of real-time data, analytics, feeds
and connectivity services, remains well positioned for steady growth, driven by solid reten-
tion of existing customers, addition of new customers, and a track record of prudent ac-
quisitions. This business, coupled with the company’s Listings business, account for more
than half of total revenues. With over 5,000 indices representing more than $1 trillion
in benchmark assets under management, the company boasts being the second-largest
fixed income provider globally.
The growth momentum of this business should be kept alive by continuous investment
in data and connectivity solutions, along with strategic acquisitions made in the last few
years. Recent initiatives in the mortgage and ETF spaces add further depth to the compa-
ny’s offerings. Fees in this business for the full-year 2018 will likely be little changed from
the preceding year’s level, with foreign exchange headwinds offsetting pricing and or-
ganic analytics gains. But the business can easily sustain a low to mid-single digits growth
pace over the next few years.
Intercontinental Exchange will report its December-quarter results on Feb 7, with the com-
pany expected to earn $3.53 per share on $4.9 billion in revenues, reflecting year-over-
year increases of +9.6% and +20.1%, respectively. For 2019, the Zacks Consensus Estimate

for earnings per share and revenues are pegged at $3.87 and $5.2 billion, representing
year-over-year growth rates of +9.5% and +6.5%, respectively.
Intercontinental Exchange has a strong balance sheet, with $1.3 billion in cash and a debt-
to-capitalization ratio of only 27.8% (through September 30th). The company generates
substantial cash flows and has only modest ongoing capital expenditure needs. In the 12
months through September 30th, ICE generated $2.4 billion cash flows from operations
and spent $278 million in capex, leaving it free cash flows of $2.13 billion.
The company has been actively returning excess cash to shareholders through a buyback
program. On the buyback front, it announced recently a fresh $2 billion program that gets
underway on January 1st, with the remaining roughly $140 million under its previous $1.2
billion program likely getting used up in Q4.
Research report on Intercontinental Exchange, Inc. (ICE)
Bright Horizons Family Solutions, Inc. (TICKER: BFAM)

Bright Horizons may not be a household name, but it is a leading player in the child-care
industry with roughly $6.5 billion in market cap and expected 2019 revenues of $2.1 bil-
lion. In fact, Bright Horizons is a leader in the employer-sponsored center-based child care
and back-up dependent care services market.
The reason we picked this obscure stock for the Top 10 portfolio is its relatively low-risk
business profile, steady growth prospects, attractive competitive advantages and favor-
able long-term demographic developments that stand to benefit the company. A key
source of competitive advantage for Bright Horizons is the breadth, depth and quality of
its service offerings, which it has developed over a successful 30-year history. According
to the Child Care Information Exchange’s 2018 Employer Child Care Trend Report, Bright
Horizons has six times more employer-sponsored centers in the U.S. than its closest com-
petitor.

Demand for quality child care is being driven by demographic trends like the retirement of
the baby boomers, growing numbers of working mothers and two working parent fami-
lies. The tight U.S. labor market is encouraging employers to invest in full service center-
based child care, back up dependent care and other such services as part of their benefits
offering as a means to bolster recruitment and retention.
Bright Horizons’ services include: Full Service Center-Based Child Care (82.1% of total rev-
enues in the third quarter of 2018), Back-Up Dependent Care Services (14.1%), and Edu-
cational Advisory Services (3.8%). The full-service business division provides traditional
center-based child care and early education, preschool, and elementary education. The
company’s business model emphasizes multi-year employer sponsorship contracts where
clients typically fund the development of new child care centers at or near their work sites
and frequently support the ongoing operation of these centers. These are long-standing
relationships that tend to be very ‘sticky’, with annual client rates for employer sponsored
child care centers averaging 94% over the last 10 years. Growth drivers in this line in-
clude enrollment gains from increasing full service centers, acquisitions and operating
efficiencies from investments. Courtesy of these positive factors, the segment’s revenues
advanced 9% in the first nine months of 2018.
Meanwhile, back-up dependent care services comprise center-based back-up child care
and in-home care for children and adult/elder dependents. Meanwhile, educational advi-
sory services are for adult learners and prospective college students, including admissions
advice.
The company’s organic growth drivers include new clients, expanding existing client re-
lationships through cross-sale of new services and additional take-up of current services.
Meanwhile, Bright Horizons’ growth strategy includes expansion through synergistic ac-
quisitions. Through 2018 (as of Sep 30th), the company has acquired five centers in the
Netherlands, six in the United States and 17 in the United Kingdom, through five separate
business acquisitions.
Bright Horizons is likely to report December quarter results on Feb 14th with the company

expected to earn 84 cents per share on $478.2 million in revenues, representing +15.1%
and +8.7% growth from the year-ago periods, respectively.
In the September quarter, although the company’s earnings matched estimates, they
were up +17.2% year over year. Revenues, however, missed expectations, but improved
+9% from the year-earlier period with gains across all three segments. Revenues increased
+8% in the full-service segment, +11% in the backup division and +19% in the educational
advisory. The company has an impressive track record of positive top- and bottom-line
surprises, having beaten estimates in five of the preceding six quarters.
Bright Horizons’ asset-light business model results in strong cash flows. The company gen-
erated operating cash flow of $239.7 million in the first nine months of 2018, up +12.5%
from the same period in 2017. A healthy balance sheet enables it to target buyout oppor-
tunities and provides it a strong foothold in the child care and early education services
market.
Research report on Bright Horizons Family Solutions, Inc. (BFAM)
US Ecology, Inc. (Ticker: ECOL)

US Ecology is $1.5 billion market cap provider of waste management services to com-
mercial and government entities. Founded in 1952 and headquartered in Boise, ID, the
company is a leading provider of environmental services to commercial and government
entities in the United States, Canada, and Mexico. The company changed its name from
American Ecology Corporation to US Ecology, Inc in February 2010.
It is a relatively low-risk play on the outlook for the industrial economy. Recent worries
about the duration of the current economic cycle notwithstanding, the outlook for indus-
trial production remains stable to positive, which should help drive mid- to high-single
digit organic growth at US Ecology, with price increases and volume growth driving or-
ganic gains.

US Ecology divides its operations into two business segments: Environmental Services and
Field & Industrial Services. The Environmental Services business, accounting for roughly
71% of the company’s total revenues, provides hazardous material management services
such as transportation, recycling, treatment and disposal of hazardous and non-hazard-
ous waste at its landfill, wastewater and other treatment facilities.
The Field & Industrial Services business brings in the rest and engages in providing pack-
aging and collection of hazardous waste and total waste management solutions at cus-
tomer sites and through 10-day transfer facilities.
We like the company’s focus on expanding service lines, controlling variable costs, increas-
ing waste throughput efficiency, employing innovative treatment techniques, and provid-
ing complementary transportation and logistics services. The acquisition of ES&H Dallas,
closed in August 2018, will help US Ecology penetrate deeper into the emergency and spill
response marketplace and extend core waste disposal and recycling business in the Gulf
region. The positive outlook for the waste management industry and growing demand
for hazardous and non-hazardous waste services has led to a favorable environment for
US Ecology.
US Ecology is scheduled to report fourth-quarter results on Feb 21st, with the company
expected to earn 66 cents per share on revenues of $148.4 million. Estimates have started
going up lately, reflecting the steadily improving outlook of the waste management mar-
ket, with the current 66 cents estimate up from 63 cents two months back. The Zacks Con-
sensus Estimate for full-year 2018 of $2.34 has risen from $2.24 two months ago. The com-
pany beat earnings estimates in the third quarter and guided higher, the fourth straight
quarter of positive earnings surprises. Gross margin reached 17% in the third quarter, up
from 13% in the year-ago quarter.
Financially, US Ecology remains in good shape, with $26 million in cash on hand and a
debt-to-capitalization ratio of 43.9%, as of Sep 30th. The company also pays a nice annual
dividend of 72 cents, which yields 1.1%. The company will most likely deploy its substantial
cash flow generation over the next couple of years towards organic growth initiatives like

building out landfill capacity and limiting dividend hikes. But we can see the company
moving towards accelerated capital returns beyond this time frame. All in all, we see US
Ecology as a quality, long-term pick.
Research report on US Ecology, Inc. (ECOL)
Omega Healthcare Investors, Inc. (Ticker: OHI)

If millennials are determining the dynamics of the retail, apartment and industrial real
estate asset categories, then it is the older population -- or the so called “silver tsunami”
-- that is shaping up the fate of the healthcare REITs. This is where Omega Healthcare In-
vestors (OHI) has a chance to shine.
The company invests in the long-term healthcare industry, mainly in skilled nursing (SNF)
and assisted living facilities. It has a portfolio of 917 operating facilities as of Sep 30th,
2018. The company has emerged as the largest SNF-focused REIT, and achieved diversifi-
cation in terms of geography and operators with 67 operators across 41 states in the U.S.
and the U.K.
This diversified portfolio helps Omega capitalize on the demographic tailwinds. Particu-
larly, the target age for skilled nursing services is usually pegged at 75 and above. Howev-
er, SNFs have been battling issues as the relatively small baby-bust generation comprised
the 75-plus population group until now. But with the baby boomers starting to turn 75 in
recent years, the baby-bust generation in the 75-plus population group is being replaced.
This age cohort will also likely grow at a rapid pace in the next 20 years. Also, in recent
years, the percentage of hospital discharges to SNFs was stable, indicating that this asset
category is well poised to gain from the demographic wave.
Omega is expected to continue riding the growth curve, with a focus on accretive buyouts
in 2019 after having completed most asset sales and other portfolio repositioning actions
this year. It remains well positioned with no upcoming material lease expirations or sub-

stantial lease renewal risk, along with favorable near-term supply.
While the SNF industry has been faced with challenges in recent years like lower occu-
pancy and shorter average length of stay, recent trends show signs of stabilization. The
industry’s prospects have also improved with the new Medicare payment model. Specifi-
cally, with the fee-for-service payment reform starting October 2019, the Patient-Driven
Payment Model (PDPM) will be used, and PPS RUG-based payments will be discarded. The
new system focuses on value-based care, lowering payments for therapy services, increas-
ing the same for complex nursing care, and encouraging lower length of stay. This would
promote efficient and premium operators who can benefit from lower administrative
burdens and record improved margin. As such, less premium players will likely get pushed
towards exiting this fragmented space, providing more buyout opportunities for Omega.
Omega enjoys a flexible financial profile that should help with its growth efforts. As of the
end of the third quarter, Omega had $920 million in cash and credit facility availability,
while its debt maturities are well laddered. The company has no secured borrowing, with
its entire $10 billion-plus assets unencumbered.
Finally, solid dividend payouts remain one of the biggest enticements for REIT investors
and Omega remains committed to boosting shareholder wealth. The healthcare REIT has
made 16 consecutive yearly hikes, generating a compound annual dividend growth of
about 10.4% from 2003 through 2017. While dividend coverage was tight in recent quar-
ters, it is expected to improve as the company wraps up portfolio repositioning and re-
turns to its growth model in 2019. It is this outlook that should more than offset the typical
headwinds that high-yield stocks like OHI face in a rising interest rate backdrop.
Research report on Omega Healthcare Investors, Inc. (OHI)

HCA Healthcare, Inc. (Ticker: HCA)

HCA Healthcare is the largest for-profit hospital operator in the country with 179 hos-
pitals. In its 50 years of operations, the company has charted a growth path from being
primarily a hospital company to include other non-hospital services such as freestanding
emergency rooms, ambulatory surgery centers, urgent care centers and physician clinics.
The expansion has been backed by acquisitions and development of facilities, with the
focus continuing in 2019.
The company’s organic growth has been well complemented by its inorganic expansion
— vertical and horizontal — enabling it to become a hospital conglomerate. This vast size
gives it an edge in bargaining with commercial payers (which account for nearly 55-58%
of revenue composition) in the health industry, consequently allowing it to enjoy strong
margins. Margins also benefit from scale economies in operations, procurement, staffing
and many other aspects of the business.
HCA Healthcare is very particular about targeting high-growth markets, where demand
for health care is high and unemployment is low. This has helped it to expand patient ad-
missions at a time when other players in the industry are suffering from soft volumes. The
company ranks number one or two in 27 of its 38 local markets in terms of market share.
The company’s stellar operating performance is evident from an increase in same facil-
ity equivalent admissions over the past several years that have contributed to revenue
growth (up every year since 2004 except 2009). Over the 5-year period from 2012 through
2017, equivalent admissions grew at an average compounded annual rate of +3%, with
the same accelerating to +4.7% in the first three quarters of 2018. The company will be a
major beneficiary of any expansion in Medicaid that some people see as a likely common
ground between the White House and Congress following the mid-terms.
That said, our favorable view of the stock isn’t contingent on such an outcome. More
important to the company’s long-term growth potential than any legislative action is its
prudent investments in its main growth verticals, namely nursing, technology, innovation,

and infrastructure. Sources of operating efficiencies include internally developed medical

technologies like PatientKeeper, iMobile and vitals monitoring devices, along with uti-
lization of informatics, big data and analytics. We view these sources to be competitive
advantages moving forward.
HCA Healthcare is scheduled to report December-quarter results on Jan 29th, with the
company expected to earn $9.34 per share on $46.5 billion revenues, reflecting year-over-
year increases of +42% and +6.7%, respectively. For 2019, the Zacks Consensus Estimates
for earnings per share and revenues are pegged at $10.11 and $49.52 billion, respective-
ly, indicating year-over-year growth of +8.3% and +6.4%. For its September quarter, the
company posted earnings of $2.16 per share (up +11.9%) on revenues of $11.5 billion (up
+4.5%).
The company generates strong consistent cash flows that it deploys in a balanced way
in growth measures as well as shareholder returns. It generated $6.3 billion in operating
cash flows in the 12-month period through September 30th, of which it spent $2.4 billion
in capital expenditures. Of the roughly $24 billion the company has spent on capital ex-
penditures since its March 2011 IPO through the first quarter of 2018, approximately 76%
has gone towards organic projects while the rest has been used for acquisitions.
HCA has a history of returning cash to shareholders through buybacks, having returned
more than $12 billion through share buybacks and more than $3 billion through special
dividends since its public debut. The company initiated a regular quarterly dividend in the
first quarter of 2018 that currently yields 1.1%.
These positive attributes are expected to help sustain the stock’s impressive run of the
last few years in 2019 as well. The stock isn’t cheap, as would be expected for an industry
leader. But its sharp pullback in December 2018 has allowed us to add this quality stock at
a relatively reasonable multiple.
Research report on HCA Healthcare, Inc. (HCA)

HMS Holdings Corp. (Ticker: HMSY)

The U.S. spends more on healthcare than any other country in the world, whether you
look at the absolute dollar amount or as a percentage of GDP. This expenditure is ex-
pected to continue going up, reaching $5.7 trillion in 2026, according to projections from
the Centers for Medicare and Medicaid Services (CMS). That’s up +55% from the 2018 level
and would account for 20% of the U.S. economy.
You have probably never heard of HMS Holdings, but this $2.5 billion market cap com-
pany is in the business of helping its customers contain their healthcare costs. It does
that by providing coordination of benefits, payment integrity and data solutions to health
plans, state agencies, federal programs and employers. The company’s services address a
wide spectrum of payment errors, including eligibility and coordination of benefits errors,
identification and investigation of fraud, and checking whether the claim amounts were
improper.
Approximately 73% of HMS Holdings’ total revenues come from the Coordination of Ben-
efits (COB) services. The company’s Analytical Services, which include Payment Integrity
and Total Population Management (PM) solutions, bring in the rest of its revenues. In its
COB service offering, HMS Holdings helps its customers identify the correct party respon-
sible for paying a claim, ensuring either prospective cost avoidance or retrospective recov-
eries. The Payment Integrity service determines if billed claims are appropriate and paid
accurately. The PM service is essentially a data analytics offering.
We like HMS Holdings for its low-risk business model, with a very high level of revenue
visibility, a sustainable competitive advantage through data and analytics, and margin
expansion opportunities through greater reliance on machine learning and artificial intel-
ligence in its entire operations. Strong cash flows and a debt-free balance sheet provide
them with the flexibility to use acquisitions to augment its capabilities, particularly in the
analytics area.
HMS Holdings is scheduled to report December-quarter results on Feb 22nd, with the

company expected to earn 25 cents per share on $156.1 million in revenues, up +4.2% and
+5.5% from the year-earlier period, respectively. The solid revenue momentum built up
through the first three quarters of 2018 should continue on significant progress with its
benefits and payment integrity, Eliza acquisition integration and advancement of the PM
business.
The stock was a strong performer last year, handily outperforming its Medical Info Sys-
tems peers as well as the broader market. But we see the momentum continuing in 2019
and beyond on the back of the company’s leadership position in this space and favorable
outlook for its business.
Research report on HMS Holdings Corp. (HMSY)
Rollins, Inc. (Ticker: ROL)

Rollins, the Atlanta-based provider of termite and pest control services to residential and
commercial customers, found a spot in the Top 10 portfolio for its safety and stability at-
tributes.
Its low risk profile is due to its prominent standing in the pest control services market,
which has a history of annual growth in the mid- single-digits percentage range. The non-
discretionary nature of pest control spending, particularly on the commercial side, is a big
reason for the business’ stability.
The residential pest control business is perceived to have more exposure to cyclical forces
in that space, but the exposure appears to be more on the sentiment side than actual rev-
enues. The company’s revenue mix is about 50/50 between residential and commercial,
which is lower than the industry average of about 70% residential.
Historically, new home construction and sales don’t have that much impact on Rollin’s
revenues as the bulk of the company’s residential business is driven by existing customers.

Rollins has historically had a retention rate in the 75% to 85% range. Retention rates are
expected to improve further through recent initiatives to make residential payments on a
monthly basis by spreading the quarterly amount on a monthly basis and disaggregating
payment from service delivery times.
Rollins has successfully maintained organic revenue growth in the +4% to +6% range
since 2006, except for the +3% growth in 2008 and +1% growth in 2009. Organic revenue
growth in the first three quarters of 2018 modestly increased to +4.5%, with the growth
pace expected to remain stable over the next few years. The company has historically
played the role of an industry consolidator, which is mature and has no barriers to entry.
Rollins acquired 34 companies in the first nine months of 2018. Growth in mosquito ser-
vices was one of Rollins’ areas of emphasis in 2018 and, by the third quarter, the company
grew this service over 30%.
Rollins remains in excellent financial health, with a debt-free balance sheet and $119 mil-
lion in cash on hand, as of September 30th. The business generates substantial amounts
of cash and has only modest ongoing capital expenditure needs. The company generated
$259 million in cash flow from operations in the 12 months through September 30th and
spent only $27 million in capex. Uses of cash include regular dividend (currently yielding
1.1%), share buybacks and acquisitions. We don’t expect any changes to this capital de-
ployment track record.
The stock outperformed the market in 2018 and is not cheap on conventional valuation
metrics. But the stock lost almost a fifth of its value in the last month of 2018, helping the
Top 10 portfolio enter this position at a much more reasonable level.
Research report on Rollins, Inc. (ROL)
The return numbers presented assume no transaction costs. Details of how Zacks calculates
performance for the Zacks Rank Portfolios and strategies is available at: http://www.zacks.com/
performance.

Research Reports
VCRA
Vocera Communications, Inc. (NYSE:VCRA) Zacks Rank: 1-Strong Buy

$36.39 USD (As of 12/25/2018) Style Value: Growth: Momentum: VGM:
Target Price $42.00 Price, Consensus & Surprise

52 Week High-Low $42.42 - $22.62
20 Day Average
317,003
Volume
Beta 0.17
Market Cap 1.10 B
Dividend / Div Yld $0.00 / 0.00%

Communication -
Industry
..
Industry Rank 48 / 257 (Top 19%)
Proj. EPS Growth (Q1) -37.93%
Proj. EPS Growth (F1) 57.58%

P/E (F1) 70.66
Last EPS Surprise 90.91%

Avg. Last 4 Surprises 125.76%
Next Report Date 2/14/2019
Earnings ESP 0.00%
Agreement Estimate Revisions (60 Days) Magnitude Consensus Estimate Trend (60 Days)
Q1 Q2 F1 F2 Q1 Q2 F1 F2
# of Analysts 8 5 10 10 Current 0.18 0.08 0.52 0.66
# of Revisions 0 0 2 2 7 Days Ago 0.18 0.08 0.52 0.66
# Up 0 0 2 1 30 Days Ago 0.18 0.08 0.52 0.66

# Down 0 0 0 1 60 Days Ago 0.18 0.08 0.50 0.66
Trend of
% Revision Agreement: 100% 50% Estimate
Revisions: 0% 0% +4.00% 0%
Industry Comparison Communication - .. | Position in Industry: 1 of 23 Industry Peers

VCRA X Industry S&P 500 KVHI HIVE HEAR
Hist. EPS Growth (3-5 yrs) NA 2.76% 8.13% 2.75% NA NA

Proj. Sales Growth (F1/F0) 11.08% 5.37% 6.37% 7.38% 1.90% 81.34%
Net Margin -3.36% -4.42% 10.94% -4.88% -10.39% 14.55%
Return on Equity -0.71% 2.45% 17.96% -0.87% -74.73% -1,050.52%
Debt/Capital 40.91% 0.00% 41.79% 16.60% 0.00% 52.48%
P/E (F1) 70.66 18.19 14.96 315.00 NA 5.01
Price/Sales (P/S) 6.23 1.01 2.08 1.01 1.16 0.74
Price/Book (P/B) 6.98 1.92 2.72 1.65 8.56 7.75
Price/Cash Flow (P/CF) NA 10.95 11.10 18.06 NA 49.72
YTD % Price Change 20.42% -18.25% -13.65% -8.70% -44.94% 632.34%
Description Computer and Technology > Telecommunications Equipment > Communication - Components
Vocera Communications Inc. provides mobile communication solutions focused on addressing critical communication challenges facing
hospitals. The Company's solutions consist of its Voice Communication, new Messaging and Care Transition solutions. It enables users
to communicate with a Vocera Wi-Fi (TM) Smartphone or Vocera Connect application for smartphones including Blackberry, iPhone, and
Android devices. Vocera Communications Inc. is headquartered in San Jose, Calif.

Research Reports continued ...
GNRC
Generac Holdlings Inc. (NYSE:GNRC) Zacks Rank: 1-Strong Buy


52 Week High-Low $60.70 - $42.96
20 Day Average Volume 352,841
Beta 1.35
Market Cap 2.83 B
Industry Electronics - Po..
Proj. EPS Growth (Q1) 1.46%

P/E (F1) 9.77

Earnings ESP 0.00%
Q1 Q2 F1 F2 Q1 Q2 F1 F2

# Up 7 2 8 8 30 Days Ago 1.39 0.80 4.66 4.56

# Down 0 1 0 0 60 Days Ago 1.20 0.74 4.14 4.27
Trend of
% Revision Agreement: 100% 67% 100% 100% Estimate
Revisions: +15.83% +8.11% +12.56% +6.79%
Industry Comparison Electronics - Po.. | Position in Industry: 1 of 2 Industry Peers

GNRC M Industry S&P 500 BWXT FIT SSEZY
Hist. EPS Growth (3-5 yrs) 0.70% 0.70% 8.13% 0.44% NA NA

Proj. Sales Growth (F1/F0) 19.83% 0.00% 6.37% 6.94% -6.69% -3.49%
Net Margin 12.45% -20.93% 10.94% 10.81% -16.32% NA
Return on Equity 47.44% -457.13% 17.96% 66.38% -24.69% NA
Debt/Capital 56.83% 69.15% 41.79% 65.84% 0.00% 60.35%
P/E (F1) 9.77 12.15 14.96 16.37 NA 14.53
Price/Sales (P/S) 1.46 0.24 2.08 2.07 0.66 NA
Price/Book (P/B) 4.04 2.71 2.72 9.34 1.44 1.96
Price/Cash Flow (P/CF) 10.55 7.54 11.10 13.94 NA 4.53
YTD % Price Change -8.06% -25.06% -13.65% -39.23% -19.09% -25.06%
Description Computer and Technology > Electronics > Electronics - Power Generation
Generac Holdings Inc. is a manufacturer of backup power generation products serving residential, light commercial and industrial
markets. The Company designs, engineers, manufactures, and markets a range of automatic, stationary standby, and portable
generators. Generac's power systems range in output from 800 watts to 9 megawatts and are available through a broad network of
independent and industrial dealers, retailers and wholesalers. The Company offers generators fueled by natural gas, liquid propane,
gasoline, diesel, and Bi-Fuel. It also provides air-cooled engines. In addition, Generac designs, manufactures, sources and modifies
engines, alternators, automatic transfer switches and other components necessary for its products. The Company's generators are fueled
by natural gas, liquid propane, gasoline, diesel and Bi-Fuel (combined diesel and natural gas). Generac Holdings Inc. is headquartered in
Waukesha, Wisconsin.

UBNT
Ubiquiti Networks, Inc. (NASDAQ: UBNT) Zacks Rank 1-Strong Buy
$93.01 USD ( As of 12/25/18 ) Style:Value: Growth: Momentum: VGM:
Data Overview Summary

Target Price $107.00 Ubiquiti has a competitively priced network and proprietary network communication
52 Week High-Low $115.44 - $49.40
platform that is well-equipped to meet end-market customer needs. The company
remains committed toward reducing operational costs by using a self-sustaining
20 Day Average Volume 376,471
mechanism for rapid product support and dissemination of information. It is
Beta 1.15 experiencing impressive growth momentum in the UniFi product family, which has
Market Cap 6.59 B contributed strongly to top-line growth in recent times. Disruptive pricing and higher
average selling prices of products should continue to drive revenues. Ubiquiti believes
that investments in R&D, inventory and operations will help it expand the addressable
Industry Wireless Equipment
market and maintain its dominant foothold in the market. The stock has also
Industry Rank 24 / 257 (Top 9%) outperformed the industry in the past three months on an average. However, probable
Current Ratio 6.12 impact of tariffs imposed on certain products imported into the United States from
China remain a cause of concern for the company.
Debt/Capital 62.67%
Net Margin 19.64%
Price/Book (P/B) 24.89 Elements of the Zacks Rank

Price/Cash Flow (P/CF) 23.49
Agreement Estimate Revisions (60 days)
Earnings Yield 4.42%
Debt/Equity 1.68
0% 100% 100% 100%
Value Score
P/E (F1) 22.60 Q1 (Current Qtr) Q2 (Next Qtr) F1 (Current Year) F2 (Next Year)
P/E (F1) Rel to Industry 43.70 Revisions: 0 Revisions: 1 Revisions: 1 Revisions: 1
Up: 0 Down: 0 Up: 0 Down: 1 Up: 1 Down: 0 Up: 1 Down: 0
PEG Ratio 1.61
P/S (F1) 6.25

Magnitude Consensus Estimate Trend (60 days)
P/S (TTM) 6.37
P/CFO 23.49
P/CFO Rel to Industry NA
EV/EBITDA Annual 19.35
Growth Score 60 30 7 Current 60 30 7 Current 60 30 7 Current 60 30 7 Current

Days Days Days Days Days Days Days Days Days Days Days Days
Proj. EPS Growth (F1/F0) 11.52% Q1 +13.25% Q2 -4.65% F1 +19.77% F2 +20.17%
Hist. EPS Growth (Q0/Q-1) 19.84%
Qtr CFO Growth 65.27 Upside Zacks Consensus Estimate vs. Most Accurate Estimate
2 Yr CFO Growth 73.94
Return on Equity (ROE) 87.51%
(NI - CFO) / Total Assets -1.09
Asset Turnover 1.00 Most Accurate: 0.94 Most Accurate: 0.82 Most Accurate: 4.12 Most Accurate: 4.29
Zacks Consensus: 0.94 Zacks Consensus: 0.82 Zacks Consensus: 4.12 Zacks Consensus: 4.29
Momentum Score
Q1 0.00% Q2 0.00% F1 0.00% F2 0.00%
1 week Volume change 6.71%
1 week Price Cng Rel to Industry -12.79%

Surprise Reported Earnings History
(F1) EPS Est 1 week change 0.00%
(Q1) EPS Est 1 week change 0.00%

Reported: 1.17 Reported: 1.01 Reported: 0.98 Reported: 0.76 Average 4 Qtr
Surprise
Estimate: 0.93 Estimate: 0.98 Estimate: 0.80 Estimate: 0.81
Q End 09/18 Q End 06/18 Q End 03/18 Q End 12/17

UBNT
The data on the front page and all the charts in the report represent market data as of 12/25/18, while the report's text is as of
12/17/2018
Overview
Headquartered in New York, NY, Ubiquiti Networks, Inc., along with
its subsidiaries, offers a comprehensive portfolio of networking
products and solutions for service providers and enterprises. Its
service-provider product platforms provide carrier-class network
infrastructure for fixed wireless broadband, wireless backhaul
systems and routing; while enterprise product platforms offer wireless
LAN infrastructure, video surveillance products and machine-to-
machine communication components.
Ubiquiti offers high-performance radios, antennas, software,

communications protocols and management tools that are designed
to deliver carrier and enterprise class wireless broadband access and
other services primarily in the unlicensed radio frequency spectrum.
The company offers its products and solutions through disruptive
price offering. They are also integrated as well as easy to deploy and
manage. Moreover, Ubiquiti follows a scalable community-led
approach based on product feedback of customers.
Broadly speaking, Ubiquiti has two different product categories,

namely, Service Provider Technology (37.1% of total revenues in
first-quarter fiscal 2019) and Enterprise Technology (62.9%). The
Service Provider Technology segment includes airMAX, airFiber and
EdgeMAX embedded radio and antenna product lines. This segment
also included products like base stations, radios, backhaul equipment and Customer Premise Equipment (“CPE”). On the other hand,
the Enterprise Technology Segment includes UniFi, and mFi product lines. This comprises Unifi Access Point ("UAP") products, Unifi
Video Products, Unifi Voice Over IP ("VOIP") phones and Unifi switches.

UBNT
Reasons To Buy:
Ubiquiti’s excellent global business model, which is highly flexible and adaptable to any Ubiquiti’s excellent global
kind of change in markets, helps it steer challenges and maximize growth. Its business business model, which is
model is backed by a rapidly growing and highly engaged community of service highly flexible and
providers, distributors, value-added resellers, systems integrators and corporate IT adaptable to any kind of
professionals, referred to as the Ubiquiti Community. Moreover, the company’s change in markets, helps it
effective management of its strong global network of more than 100 distributors and steer challenges and
master resellers has improved its visibility for future demand as well as inventory maximize growth.
management techniques. Periodic reporting by channel partners has added to
operational strength. Ubiquiti expects its resilient business model to contribute
significantly toward its growth momentum, going forward.
Ubiquiti has outperformed the industry with an average return of 10.1% against the decline of 10.7% for the latter in the past three
months. During first-quarter fiscal 2019, the company’s revenues rose an impressive 15.1% year over year. The company’s
Enterprise Technology segment sales continued its momentum on the back of solid demand for the entire UniFi product family.
Disruptive pricing and higher average selling prices of recently launched products also drove the top line. The company believes that
its global market share in Enterprise Technology will continue to grow, fueled by growing adoption of UniFi products, including
switches, security gateways, cameras and other complementary products.
Ubiquiti spends significantly toward research and development activities for developing innovative products and state-of-art
technology in order to expand its addressable market and remain at the cutting edge of networking technology. Ubiquiti believes its
new product pipeline will help it increase average selling prices for high performance, best value products, thus raising the top line.
Ubiquiti upgraded the UniFi ecosystem, which includes hotspot analytics and high-density WLAN improvements, and added new
features to the AmpliFi product family. The company’s strategic product launches at disruptive prices has helped it beat rivals to a
great extent. Apart from launching products, reduction of labor-related costs also remains one of the chief highlights of the research
and development initiatives. This apart, the company believes strong investments in R&D, inventory and operations will help it
expand the addressable market and maintain its dominant foothold in the industry.
Ubiquiti maintains a competitively priced network and proprietary network communication platform that is extremely well-equipped to
meet end-market customer needs. In addition, the company is committed toward reducing its operational costs by using a self-
sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of Ubiquiti Community.
The company has made significant investments in inventory to reduce lead times, meet increasing demand and support the growing
number of customers. These efforts have optimized Ubiquity’s inventory with the market demand. Apart from this, Ubiquiti remains
committed toward enhancing the value of its shareholders. It repurchased 1,238,163 shares for $112.8 million at an average price of
$91.07 per share during the first quarter of fiscal 2019. In addition to boosting shareholder return, this enhances investors’
confidence in the stock.
Risks
Ubiquiti is exposed to political and economic instability on account of its geographically diverse scale of operations. Certain
operating expenses are denominated in currencies of countries where the operations are located, and rising U.S. dollar has
dented its profitability. Also, natural disasters like floods, earthquakes, storms and epidemics can disrupt the company’s
shipments, thereby affecting its financial performance. These factors are beyond the company’s control and can weigh on its
profitability in the short run. This apart, majority of the contract manufacturers, logistics centers and certain administrative and
research and development operations of the company are located in natural disaster prone regions adding to its woes. This also
heightens the chances of the company’s revenue erosion in the future.
Ubiquiti operates in an extremely price-competitive environment, which includes big multinational wireless telecom players,
service providers as well as newly established companies. The company operates in enterprise WLAN, solar, video surveillance,
wireless backhaul and machine-to-machine communications markets, which are highly competitive in nature. Longer operating
histories, greater brand recognition, larger customer bases and significantly greater resources of competitors add to the
company’s woes. As a result, the company needs to maintain competitive selling prices while continuously enhancing its product
offerings. Moreover, this dynamic market is characterized by rapid technological changes, evolving standards, frequent product
introductions and short product life cycles that make it crucial for Ubiquiti to maintain its human resource pool. The company will
continue to make substantial investments in research and development. This is likely to hurt the company’s margins in the short
term.
Being a multinational company, Ubiquiti is exposed to a number of intellectual property-related risks. The company has limited
ability to obtain and enforce intellectual property rights which exposes it to risk of copyright infringement. Additionally, in emerging
markets, namely China and South America, it is difficult for Ubiquiti networks to enforce IPR and this is particularly risky as a
significant portion of demand is generated from this region. Also, the extent of the company’s commercial access largely
depends on whether the component suppliers are not infringing intellectual property rights owned by others. Unfortunately, for

UBNT
Ubiquiti, it operates in an industry where component suppliers are targets of extensive intellectual property litigation, which adds
to the legal expenditure of the company. Historically, the company has received claims from third parties asserting intellectual
property infringement and other related claims. Consequently, as the profile of the company magnifies, the frequency and
significance of these claims may increase, which will likely prove to be a major drag on its financials.
Ubiquiti’s offerings are subject to export control and economic sanctions laws in the United States and elsewhere, and failure to
comply with these laws can adversely impact its reputation and financials. Additionally, as government regulations are typically
intended to protect the privacy and security of personal information that is collected, stored and transmitted in or from the
governing jurisdiction, Ubiquiti may find it increasingly difficult to sell products on account of delayed product launches, escalating
product-launch costs, liabilities and negative publicity.
Last Earnings Report

Ubiquiti Q1 Earnings Beat Estimates on Revenue Growth Quarter Ending 09/2018
Ubiquiti reported healthy first-quarter fiscal 2019 results, wherein both the bottom line and Report Date Nov 09, 2018
the top line surpassed the respective Zacks Consensus Estimate. Sales Surprise NA
EPS Surprise 25.81%
Net Income Quarterly EPS 1.17
Annual EPS (TTM) 3.92
On a GAAP basis, net income for the fiscal first quarter was $85.7 million or $1.16 per
share compared with $74.9 million or 92 cents per share in the prior-year quarter primarily
due to higher revenues.
Non-GAAP net income came in at $86.2 million or $1.17 per share compared with $74.9 million or 92 cents per share a year ago. The
bottom line beat the Zacks Consensus Estimate by 24 cents.
Revenues
Quarterly revenues increased 15.1% year over year to $282.9 million primarily driven by higher sales at Enterprise Technology
business. The top line surpassed the Zacks Consensus Estimate of $252 million.
By product type, revenues from Service Provider Technology were $105 million compared with $119.9 million in the year-ago quarter.
Enterprise Technology revenues were $177.9 million compared with $126 million a year ago.
Other Quarter Details
Gross profit increased to $131.6 million from $111.7 million in the year-ago quarter on the back of top-line growth. Gross margin
improved to 46.5% from 45.4%. Ubiquiti expects to incur costs due to tariffs imposed on certain Chinese products imported into the
United States and thus anticipates near-term gross margin between 42% and 45%.
Total operating expenses were $32 million compared with $24.6 million in the year-earlier quarter. Despite the year-over-year increase
in operating expenses, operating income improved to $99.6 million from $87.1 million owing to higher revenues.
Geographically, revenues from North America were $119.4 million compared with $96.2 million a year ago. Revenues from Europe, the
Middle East and Africa were $124.9 million, up from $93.3 million. Revenues from Asia Pacific were $24.4 million compared with $25.3
million in the prior-year quarter. Revenues from South America were $14.2 million, down from $31.1 million.
Cash Flow and Liquidity
During the first quarter of fiscal 2019, Ubiquiti generated $93.9 million of cash from operating activities compared with $96.9 million in
the year-ago quarter. As of Sep 30, 2018, the company had $480.8 million of cash and cash equivalents with long-term debt of $454.3
million.
Ubiquiti repurchased 1,238,163 shares for $112.8 million at an average price of $91.07 per share during the reported quarter.
Fiscal 2019 Outlook
Ubiquiti has reiterated its earlier guidance for full fiscal 2019 based on the recent demand environment in its end markets. The company
expects to generate revenues between $1.1 billion and $1.2 billion and earnings per share (EPS) of $4.00-$4.80 in fiscal 2019. Also,
due to the probable impact of the tariffs imposed for certain products imported into the United States from China, the low-end of EPS
may decline to $3.65 or lower. The company anticipates to mitigate the effect of the tariffs in the long-term and expects long-term gross
margin between 45% to 50%.

UBNT
Recent News
On Nov 21, 2018, Ubiquiti announced that it has introduced AmpliFi HD Gamer's Edition — its latest addition to the AmpliFi family of
whole-home Wi-Fi solutions. Notably, the AmpliFi HD Gamer's Edition features GeForce NOW QoSmode which is developed by
Ubiquiti along with NVIDIA's help to adjust networks for ideal game-streaming performance.
Valuation
The ‘Value’ section of the Industry Comparisons table below provides all the key valuation metrics for Ubiquiti contrasted with its
nearest peers as well as the industry and the S&P 500 index. Please note that the Zacks Value Style Score condenses all of these
valuation metrics into one score that provides a true measure of the stock’s intrinsic value. A Value Style Score of ‘A’ (or ‘B’) is
highly desirable, particularly when accompanied with Zacks Rank #1 (Strong Buy) or Zacks Rank # 2 (Buy).
The target price of $127.00 is based on 30.8x the Zacks Consensus Estimate for F1 earnings.

UBNT
Industry Analysis Zacks Industry Rank: 24 / 257 (Top 9%) Top Peers
PC-Tel, Inc. (PCTI)

QUALCOMM Incorporated (QCOM)
Harris Corporation (HRS)
InterDigital, Inc. (IDCC)
Sierra Wireless, Inc. (SWIR)
Juniper Networks, Inc. (JNPR)
Motorola Solutions, Inc. (MSI)
Ericsson (ERIC)
Industry Comparison Wireless Equipment | Position in Industry: 1 of 14 Industry Peers
UBNT X Industry S&P 500 SWIR CMTL IDCC

VGM Score - -
Market Cap 6.59 B 549.60 M 17.71 B 471.15 M 549.60 M 2.13 B
# of Analysts 2 3 14 2 2 3
Dividend Yield 1.08% 0.00% 2.26% 0.00% 1.74% 2.22%
Value Score - -
Cash/Price 0.09 0.15 0.06 0.14 0.07 0.48
EV/EBITDA 19.35 11.77 11.07 11.77 9.77 3.83
PEG Ratio 1.61 1.90 1.45 1.19 4.74 2.21
Price/Book (P/B) 24.89 1.78 2.72 1.05 1.09 2.10
Price/Cash Flow (P/CF) 23.49 10.76 11.10 9.52 9.90 7.63
P/E (F1) 22.60 21.96 14.96 14.31 23.70 33.14
Price/Sales (P/S) 6.25 1.14 2.08 0.61 0.90 4.88
Earnings Yield 4.42% 4.32% 6.66% 6.96% 4.22% 3.01%
Debt/Equity 1.68 0.18 0.66 0.09 0.38 0.31
Cash Flow ($/share) 3.96 1.37 5.82 1.37 2.32 8.27
Growth Score - -
Hist. EPS Growth (3-5 yrs) 19.84% 8.11% 8.13% 59.20% -23.96% 41.05%
Proj. EPS Growth (F1/F0) 11.52% -8.77% 17.38% -13.02% 29.33% -68.59%
Curr. Cash Flow Growth 10.75% 4.78% 10.00% -3.72% 16.41% -18.89%
Hist. Cash Flow Growth (3-5 yrs) 28.89% 7.72% 7.47% 14.08% 12.16% -1.87%
Current Ratio 6.12 1.69 1.30 1.69 2.14 4.06
Debt/Capital 62.67% 23.60% 41.79% 8.36% 27.71% 23.60%
Net Margin 19.64% -0.44% 10.94% -3.13% 5.72% 26.19%
Return on Equity 87.51% 5.05% 17.96% 2.66% 5.05% 17.50%
Sales/Assets 1.00 0.79 0.56 1.13 0.72 0.25
Proj. Sales Growth (F1/F0) 4.57% 0.00% 6.37% 15.28% 10.73% -42.99%
Momentum Score - -
Daily Price Chg -1.83% 0.00% -2.59% -0.53% -4.72% -3.34%
1 Week Price Chg -12.79% -6.96% -6.46% -5.13% -5.85% -9.07%
4 Week Price Chg -14.30% -11.51% -11.77% -18.57% -10.68% -13.50%
12 Week Price Chg -5.92% -17.04% -19.62% -34.98% -36.61% -21.16%
52 Week Price Chg 35.88% -17.23% -14.29% -36.55% 2.50% -17.23%
20 Day Average Volume 376,471 35,251 2,702,241 279,445 199,020 270,618
(F1) EPS Est 1 week change 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
(F1) EPS Est 4 week change 0.00% 0.00% 0.00% 0.00% 6.23% -1.47%
(F1) EPS Est 12 week change 19.62% 5.27% 0.22% -5.22% 35.24% 16.81%
(Q1) EPS Est Mthly Chg 0.00% 0.00% 0.00% 0.00% 26.09% -11.77%

UBNT
Zacks Rank Education

The Zacks Rank is calculated from four primary inputs: Agreement, Magnitude, Upside and Surprise.
Agreement
This is the extent which brokerage analysts are revising their earnings estimates in the same
direction. The greater the percentage of estimates being revised higher, the better the score for this
component.
For example, if there were 10 estimate revisions over the last 60 days, with 8 of those revisions up,
and the other 2 down, then the agreement factor would be 80% positive. If, however, 8 were to the
downside with only 2 of them up, then the agreement factor would be 80% negative. The higher the
percentage of agreement the better.
Magnitude
This is a measure based on the size of the recent change in the current consensus estimates. The
Zacks Rank looks at the magnitude of these changes over the last 60 days.
In the chart to the right, the display shows the consensus estimate from 60-days ago, 30-days ago,
7-days ago, and the most current estimate The difference between the current estimate and the
estimate from 60-days ago is displayed as a percentage. A larger positive percentage increase will
score better on this component.
Upside
This is the difference between the most accurate estimate, as calculated by Zacks, and the
consensus estimate. For example, a stock with a consensus estimate of $1.00, and a most
accurate estimate of $1.05 will have an upside factor of 5%.
This is not an indication of how much a stock will go up or down. Instead, it's a measure of the
difference between these two estimates. This is particularly useful near earnings season as a
positive upside percentage can be used to help predict a future surprise.
Surprise
The Zacks Rank also factors in the last few quarters of earnings surprises. Companies that have
positively surprised in the recent past have a tendency of positively surprising again in the future (or
missing if they recently missed).
A stock with a recent track record of positive surprises will score better on this factor than a stock
with a history of negative surprises. These stocks will have a greater likelihood of positively
surprising again.
Zacks Style Score Education

The Zacks Style Score is as a complementary indicator to the Zacks Rank, giving investors a way to
focus on the best Zacks Rank stocks that best fit their own stock picking preferences. Value Score
Academic research has proven that stocks with the best Growth, Value, and Momentum Growth Score
characteristics outperform the market. The Zacks Style Scores rate stocks on each of these
individual styles and assigns a rating of A, B, C, D and F. An A, is better than a B; a B is better than Momentum Score
a C; and so on.
VGM Score
As an investor, you want to buy stocks with the highest probability of success. That means buying
stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Style Score of an A or a B.

UBNT
Disclosures
The analysts contributing to this report do not hold any shares of this stock. The EPS and revenue forecasts are the Zacks
Consensus estimates. Additionally, the analysts contributing to this report certify that the views expressed herein accurately reflect the
analysts' personal views as to the subject securities and issuers. Zacks certifies that no part of the analysts compensation was, is, or
will be, directly or indirectly, related to the specific recommendation or views expressed by the analyst in the report. Additional
information on the securities mentioned in this report is available upon request. This report is based on data obtained from sources we
believe to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. Because of individual objectives, the
report should not be construed as advice designed to meet the particular investment needs of any investor. Any opinions expressed
herein are subject to change. This report is not to be construed as an offer or the solicitation of an offer to buy or sell the securities
herein mentioned. Zacks or its officers, employees or customers may have a position long or short in the securities mentioned and buy
or sell the securities from time to time. Zacks uses the following rating system for the securities it covers which results from a
proprietary quantitative model using trends in earnings estimate revisions. This model is proven most effective for judging the timeliness
of a stock over the next 1 to 3 months. The model assigns each stock a rank from 1 through 5. Zacks Rank 1 = Strong Buy. Zacks Rank
2 = Buy. Zacks Rank 3 = Hold. Zacks Rank 4 = Sell. Zacks Rank 5 = Strong Sell. We also provide a Zacks Industry Rank for each
company which provides an idea of the near-term attractiveness of a company s industry group. We have 264 industry groups in total.
Thus, the Zacks Industry Rank is a number between 1 and 264. In terms of investment attractiveness, the higher the rank the better.
Historically, the top half of the industries has outperformed the general market.

ICE
Intercontinental Exchange Inc. (NYSE: ICE) Zacks Rank 2-Buy

Target Price $82.00 Intercontinental Exchange’s successful integration of acquisitions, achievement of
52 Week High-Low $82.65 - $66.92
cost synergies and a reduced debt level well poise ICE for long-term growth.
Moreover, a continued strength in its energy franchise, improving recurring market
20 Day Average Volume 3,171,455
data revenues (2018 revenues to grow 5-6%) and ongoing initiatives should keep
Beta 0.50 growth on track. However, rising expenses, foreign currency fluctuations and stricter
Market Cap 40.26 B regulations raise concerns. The company estimates 2018 operating expenses in the
range of $2.04-$2.05 billion and adjusted operating expense in the band of $2-$2.04
billion. Interest expenses are anticipated at $73 million for fourth-quarter 2018. Shares
Industry Securities and Exchanges
of Intercontinental Exchange have underperformed the industry year to date.
Current Ratio 1.00

Elements of the Zacks Rank
Debt/Capital 27.80%
Net Margin 43.09% Agreement Estimate Revisions (60 days)
Price/Book (P/B) 2.39
Price/Cash Flow (P/CF) 18.08 100% 100% 100% 100%

Earnings Yield 5.01%
Debt/Equity 0.38
Q1 (Current Qtr) Q2 (Next Qtr) F1 (Current Year) F2 (Next Year)
Revisions: 4 Revisions: 2 Revisions: 5 Revisions: 4
Value Score
P/E (F1) 19.99
P/E (F1) Rel to Industry 11.15 Magnitude Consensus Estimate Trend (60 days)
PEG Ratio 2.03
P/S (F1) 6.67
P/S (TTM) 6.87
P/CFO 18.08
P/CFO Rel to Industry NA 60 30 7 Current 60 30 7 Current 60 30 7 Current 60 30 7 Current

EV/EBITDA Annual 14.02 Q1 +3.53% Q2 +1.06% F1 +2.61% F2 +1.04%
Growth Score
Proj. EPS Growth (F1/F0) 19.86% Upside Zacks Consensus Estimate vs. Most Accurate Estimate
Hist. EPS Growth (Q0/Q-1) 16.50%
Qtr CFO Growth 40.05
Return on Equity (ROE) 11.67% Most Accurate: 0.90 Most Accurate: 0.95 Most Accurate: 3.55 Most Accurate: 3.87
(NI - CFO) / Total Assets NA
Q1 2.27% Q2 0.00% F1 0.40% F2 0.00%
Asset Turnover 0.07
Momentum Score Surprise Reported Earnings History

1 week Volume change 3.92%

(F1) EPS Est 12 week change 2.02% Surprise
(Q1) EPS Est 1 week change 0.00% Q End 09/18 Q End 06/18 Q End 03/18 Q End 12/17

ICE
12/04/2018
Overview
Established in 2000, Intercontinental Exchange, Inc. (ICE) operates
a network of global futures, equity and equity options exchanges, as
well as global clearing and data services throughout financial and
commodity markets. The company completed its initial public offering
in Nov 2005. Though largely focused on energy products, the
company expanded via a number of acquisitions. The acquisition of
The New York Stock Exchange (NYSE) in 2013 added new asset
classes and products to ICE’s portfolio including interest rates,
commodities, equity derivatives, equity options, cash equities and the
license to administer LIBOR. The Atlanta- based company currently
operates in marketplaces for trading and clearing a broad range of
derivatives and securities contracts through major asset classes,
including energy and agricultural commodities, interest rates,
equities, equity derivatives, credit derivatives, bonds and currencies.
The company conducts derivatives business through its regulated

exchanges, including ICE Futures Europe, ICE Futures U.S., ICE
Futures Canada and ICE Endex. The company’s over the counter
(OTC) markets include both regulated and unregulated platforms for
the execution of cleared and bilateral, or non-cleared, credit default
swaps (CDS) instruments and bilateral energy contracts. The
company lists financially settled bilateral energy contracts on ICE
Swap Trade and provide electronic trading on its physically settled
North American natural gas, power, and global crude and refined oil products.
ICE operates clearing houses, including ICE Clear Europe, ICE Clear U.S and ICE Clear Credit, while it conducts securities trading and
listings through the NYSE, NYSE MKT and NYSE Arca. Also, the company offers data and technology services.
Effective Nov 4, 2016, ICE went for a five-for-one stock split of common stock.

ICE
Reasons To Buy:
Shares of Intercontinental Exchange have gained 15% year to date, underperforming ICE’s successful
the industry’s increase of 22.1%. Nonetheless, given an array of products along with a integration of NYSE, timely
broad range of risk management services, strategic acquisitions and a solid capital achievement of cost
position, the company expects its shares to see a turnaround in the near term. Shares synergies and strategic
at the current level are undervalued. The company’s price-to-book ratio has a trailing intiatives strengthen ICE’s
12-month P/B ratio of 2.7, lower than the industry average of 3.1. Intercontinental growth profile.
Exchange looks a good investment bet, banking on its solid fundamentals.
The ICE’s acquisition of NYSE in Nov 2013 consolidated ICE’s position as a premier stock trading platform when it became the
one of the largest global exchanges. Given end-to-end multi-asset portfolio, allowing global diversification while tapping new
opportunities in the emerging economies, ICE enjoys a competitive advantage. Through the first nine months of 2018, the NYSE
raised more than $25 billion through IPOs. Notably, ICE has a good history of acquisitions including CLE, Interactive Data
Corporation, Trayport, Standard & Poor’s Securities Evaluations, Inc., or SPSE, TMX Atrium, National Stock Exchange, TMC and
Virtu BondPoint. Several strategic acquisitions have not only expanded growth of ICE but have also resulted in achieving expense
synergies. Management is on track with the targeted 2018 synergies of at least $30 million.
ICE develops and offers an array of products along with a broad range of risk management services, including trade execution,
market data, pre and post-trade processing and clearing services on an integrated platform. Its compelling product and service suit,
along with strategic acquisitions, helped ICE increase its revenues. The company anticipates revenue growth between 6% and 7%
in 2018 and is also likely to achieve a long-term target of mid to high-single digits. We believe that the company should retain its
revenue momentum in the coming quarters, given its strength in global data services (management estimates Data Services
business to grow 7% in 2018), including pricing and analytics, desktop and connectivity services across several asset classes for
futures and OTC markets, as well as diverse liquid, global derivatives and equities markets across 12 exchanges, six clearing
houses and nine asset classes.
Also, a lowered tax rate (21% in the third quarter) enabled the company to achieve earnings and helped yielding a 16% increase in
adjusted earnings. For the fourth quarter of 2018, the adjusted tax rate is estimated to range between 23% and 24%. With the focus
on executing its strategic initiatives, boosting shareholder’s value, innovating to cater to the clients efficiently, we expect the
company to deliver a strong performance, going forward.
With over 5,000 indices representing more than $1 trillion in benchmark assets under management, the company boasts being the
second-largest fixed income provider globally. Notably, volume growth continues to drive trading and clearing segment revenues.
The company remains well-positioned for growth on the back of its solid energy franchise, increasing recurring market data
revenues and strategic initiatives.
Further, ICE possesses a strong balance sheet with solid cash and capital position, reflecting an optimal capital spending and sound
operating cash flow growth. Riding high on operational strength, ICE generated an operating cash flow of record $1.7 billion in the
first nine months of 2018 (up 23% from the same period in 2017). This helped the company pay back around $1.5 billion to its
shareholders, make strategic investment and deliver a stable balance sheet.
During the first quarter of 2018, the company increased its quarterly dividend by 20%, which marked the fourth consecutive double-
digit hike in dividend since its initiation in December 2013. The company also engages in regular share repurchases and as of Sep
30, 2018, the remaining share buyback authorization allows the company to repurchase up to $141 million worth of shares. In
September 2018, the company approved a new $2-billion share buyback program that will begin in January 2019. This new
authorization will provide the required support to buy back shares over the next six quarters as well as allow financial flexibility. A
healthy and minimal risk-based balance sheet is likely to continue providing stability and buoyancy to the company over the medium
to long term.
Risks
ICE faces ample risks from its operations in several international markets, including the UK, Continental Europe and Canada. A
major part of the company’s revenues, expenses, assets and liabilities are denominated in U.S. dollars, pounds sterling, euros
and Canadian dollars. As the company’s financial statements are presented in U.S. dollars, potential increases or decreases in
the value of the U.S. dollar against other currencies is likely to affect the net operating revenues, operating income and the value
of balance sheet items denominated in foreign currencies.
Total operating expenses have increased more than fourfold in the last five years. This trend continued through the first nine
months of 2018 with operating expenses increasing 3.5% from the same period in 2017. The company reaffirmed its outlook for
expenses with adjusted operating expenses estimated to range between $2 billion and $2.04 billion for 2018. Operating expenses
are projected to be in the $2.04-$2.05 billion range for the full year. Also, interest expense is anticipated at $73 million for fourth-
quarter 2018. Additionally, the company now estimates expenses of $9-$10 million in relation to MERS. We believe that expenses

ICE
are likely to remain elevated in the near term, given the several strategic initiatives including product launches, technology
upgrade as well as higher debt and integration expenses, capital and infrastructural costs, rebates and compensation and
benefits expenses.
Moreover, ICE continues to face a challenging global operating environment as arch-rivals are rapidly evolving through new,
innovative product and service launches in order to gain market share and stay ahead in the competition. The vast outlay of
growth plans by dominant players through acquisitions and setting up of clearing houses, along with product and service
initiations in the derivatives market have already pointed out the swiftly changing dynamics of the exchange industry. Such
aggressive industry efforts are not only keeping management on its toes but are also directly threatening its operations and
competitive position. Hence, we believe that management should make productive endeavors as well as manage cash and
liquidity position proactively, in order to retain and improve its industry position.

Intercontinental Exchange Q3 Earnings Top, Rise Y/Y Quarter Ending 09/2018
Intercontinental Exchange, Inc. delivered third-quarter 2018 adjusted earnings per share of Report Date Oct 31, 2018
85 cents, beating the Zacks Consensus Estimate of 80 cents by 6.3%. Also, the bottom line Sales Surprise 0.64%
improved 16.4% on a year-over-year basis. EPS Surprise 6.25%
Quarterly EPS 0.85
The company’s performance in the reported quarter represented a strong performance
across futures, cash equities, listings and data services business lines, thereby marking the
22nd consecutive quarter of revenue growth on a year-over-year basis.
Apart from reporting record revenues plus earnings, the company was able to generate record operating cash flows. With the current
year coming to an end, the company remains committed to its growth initiatives along with value creation.
On a GAAP basis, net income was 79 cents per share, up 25.4% year over year.
Performance in Detail
Intercontinental Exchange’s revenues of $1.2 billion increased 4.7% year over year on higher revenues at transaction and clearing, net
(0.3%), data services (2.3%), listings segments (6.7%) as well as other revenues (12.9%). Moreover, the top line outpaced the Zacks
Consensus Estimate by 0.7%.
Total operating expenses increased 8.7% year over year to $598 million, primarily due to higher compensation and benefits,
professional services, acquisition-related transaction and integration costs, technology and communication as well as depreciation and
amortization. Adjusted operating expenses were $521 million in the third quarter, up 8.8% from the year-ago quarter’s figure.
Adjusted operating income inched up 1.8% year over year to $679 million. Adjusted operating margin was 57%, having contracted 100
basis points.
Trading and Clearing's adjusted operating income of $352 million grew 2.9% year over year while adjusted operating margin contracted
200 basis points. Data and Listings' adjusted operating income nudged up 0.6% year over year to $327 million while adjusted operating
margin contracted 100 basis points.
Financial Update
As of Sep 30, 2018, Intercontinental Exchange had cash and cash equivalents of $1.3 billion, up 2.1% from the level as of Dec 31,
2017. Long-term debt of $6.5 billion inched up 52.1% from 2017-end level.
Total equity was $16.85 billion as of Sep 30, 2018, which dipped 0.8% from $16.99 billion as of Dec 31, 2017.
Free cash flow was $1.7 billion in the first nine months of 2018, up 33.3% year over year.
Share Repurchase and Dividend Update
During the third quarter, the company bought back shares worth approximately $1.1 billion. It has nearly $1.5 billion throughout the
reported period.
In the quarter under review, the company paid dividends amounting to $417 million.

ICE
Recent News
Intercontinental Exchange October Volumes Solid – Nov 5, 2018
Intercontinental Exchange reported solid average daily volume (ADV) for October. Agriculture and Metals ADV for the month increased
14% year over year.
Valuation
The ‘Value’ section of the Industry Comparisons table below provides all the key valuation metrics for ICE contrasted with its nearest
peers as well as the industry and the S&P 500 index. Please note that the Zacks Value Style Score condenses all of these valuation
metrics into one score that provides a true measure of the stock’s intrinsic value. A Value Style Score of A or B is highly desirable,
particularly when accompanied with Zacks Rank #1 (Strong Buy) or Zacks Rank # 2 (Buy).
The target price of $92.00 is based on 26.1x the Zacks Consensus Estimate for F1 earnings.

ICE
Industry Analysis Zacks Industry Rank: 7 / 257 (Top 3%) Top Peers
OTC Markets Group Inc. (OTCM)

Cboe Global Markets, Inc. (CBOE)
CME Group Inc. (CME)
Nasdaq, Inc. (NDAQ)
American Express Company (AXP)
AeroCentury Corp. (ACY)
Triangle Capital Corporation (BBDC)
MarketAxess Holdings Inc. (MKTX)
Industry Comparison Securities And Exchanges | Position in Industry: 1 of Industry Peers

6
ICE X Industry S&P 500 NDAQ CME CBOE

VGM Score - -
Market Cap 40.26 B 11.41 B 17.71 B 12.58 B 60.03 B 10.24 B
# of Analysts 6 5 14 6 5 5
Dividend Yield 1.36% 1.47% 2.26% 2.29% 1.59% 1.36%
Value Score - -
Cash/Price 0.03 0.04 0.06 0.04 0.02 0.01
EV/EBITDA 14.02 16.65 11.07 12.45 21.73 19.27
PEG Ratio 2.03 2.03 1.45 1.68 2.37 1.70
Price/Book (P/B) 2.39 3.25 2.72 2.25 2.58 3.25
P/E (F1) 19.99 20.22 14.96 16.08 26.53 19.41
Price/Sales (P/S) 6.67 6.33 2.08 3.02 15.11 3.87
Earnings Yield 5.01% 4.95% 6.66% 6.21% 3.77% 5.15%
Debt/Equity 0.38 0.22 0.66 0.55 0.15 0.29
Cash Flow ($/share) 3.91 4.19 5.82 5.27 5.40 4.97
Growth Score - -
Hist. EPS Growth (3-5 yrs) 16.50% 15.89% 8.13% 13.02% 15.27% 15.89%
Proj. EPS Growth (F1/F0) 19.86% 18.72% 17.38% 17.57% 39.58% 37.43%
Curr. Cash Flow Growth 0.53% 6.86% 10.00% 10.75% 4.00% 133.22%
Hist. Cash Flow Growth (3-5 yrs) 27.15% 22.12% 7.47% 10.32% 7.80% 25.81%
Current Ratio 1.00 1.01 1.30 0.94 1.09 0.91
Debt/Capital 27.80% 17.74% 41.79% 35.42% 12.80% 22.68%
Net Margin 43.09% 29.66% 10.94% 17.95% 113.67% 20.41%
Return on Equity 11.67% 14.62% 17.96% 13.69% 9.18% 15.55%
Sales/Assets 0.07 0.17 0.56 0.27 0.06 0.50
Momentum Score - -
Daily Price Chg -2.94% -2.82% -2.59% -3.47% -3.30% -5.05%
1 Week Price Chg -5.55% -5.35% -6.46% -8.12% -2.66% -4.77%
4 Week Price Chg -10.44% -7.57% -11.77% -12.65% -6.70% -15.05%
12 Week Price Chg -5.62% -4.12% -19.62% -10.55% 3.77% -4.93%
52 Week Price Chg 0.61% -0.29% -14.29% 0.87% 18.55% -26.71%
20 Day Average Volume 3,171,455 893,523 2,702,241 918,679 2,354,810 887,046
(F1) EPS Est 12 week change 2.02% 2.30% 0.22% -1.04% 0.12% 3.56%
(Q1) EPS Est Mthly Chg 0.19% 0.19% 0.00% 0.14% 0.75% 0.21%

ICE

Agreement
component.
Magnitude
Upside
Surprise
surprising again.

a C; and so on.
VGM Score

ICE
Disclosures

BFAM
Bright Horizons Family Solutions Inc. (NYSE:BFAM) Zacks Rank: 2-Buy


52 Week High-Low $123.93 - $91.29
20 Day Average
283,043
Volume
Beta 0.23
Market Cap 6.12 B
Industry Schools
86 / 257 (Top
Industry Rank
33%)
P/E (F1) 33.46
Earnings ESP 0.00%
Q1 Q2 F1 F2 Q1 Q2 F1 F2
# of Analysts 3 NA 3 3 Current 0.84 NA 3.15 3.55
# of Revisions 2 NA 2 3 7 Days Ago 0.84 NA 3.15 3.55
# Up 0 NA 0 1 30 Days Ago 0.84 NA 3.15 3.55

# Down 2 NA 2 2 60 Days Ago 0.85 NA 3.16 3.60
Trend of
% Revision Agreement: 100% 100% 67% Estimate
Revisions: -1.18% -0.32% -1.39%
Industry Comparison Schools | Position in Industry: 1 of 20 Industry Peers

BFAM X Industry S&P 500 TAL ATGE EDU
Hist. EPS Growth (3-5 yrs) 20.06% -1.25% 8.13% 27.74% 0.82% 10.87%
Proj. Sales Growth (F1/F0) 9.32% 0.00% 6.37% 48.48% -10.34% 25.97%
Net Margin 8.73% 2.91% 10.94% 11.61% 0.89% 9.86%
Return on Equity 22.55% 8.66% 17.96% 16.10% 11.43% 15.47%
Debt/Capital 57.11% 4.61% 41.79% 0.00% 17.16% 9.32%
P/E (F1) 33.46 18.81 14.96 47.16 15.64 21.39
Price/Sales (P/S) 3.28 0.97 2.08 6.68 2.04 2.72
Price/Book (P/B) 7.84 1.67 2.72 6.72 1.82 3.58
YTD % Price Change 12.12% -13.23% -13.65% -13.23% 5.99% -46.29%
Description Consumer Discretionary > Other Consumer Discretionary > Schools

Bright Horizons Family Solutions Inc. is engaged in providing employer-sponsored child care, early education and work/life solutions. Its
employer-sponsored child care programs include child care and early education centers, infant/toddler/preschool care and education, full
and part-time child care, kindergarten, school-age programs, summer camps and back-up care. Bright Horizons manages child care
centers for corporations, hospitals, universities and government agencies The Company operates primarily in North America, Europe and
India. Bright Horizons Family Solutions Inc. is based in Watertown, Massachusetts.

ECOL
US Ecology, Inc. (NASDAQ:ECOL) Zacks Rank: 2-Buy


52 Week High-Low $77.15 - $44.90
20 Day Average
92,896
Volume
Beta 0.48
Market Cap 1.29 B
Waste Removal
Industry
Se..
P/E (F1) 25.10

Earnings ESP 0.00%
Q1 Q2 F1 F2 Q1 Q2 F1 F2

# Up 1 1 2 2 30 Days Ago 0.66 0.44 2.34 2.63

# Down 1 0 0 0 60 Days Ago 0.63 0.41 2.24 2.47
Trend of
Revisions: +4.76% +7.32% +4.46% +3.64%
Industry Comparison Waste Removal Se.. | Position in Industry: 2 of 9 Industry Peers

ECOL X Industry S&P 500 AQMS ADSW CLH
Hist. EPS Growth (3-5 yrs) -1.58% 5.15% 8.13% NA NA -39.98%

Net Margin 12.30% 3.16% 10.94% -789.73% 3.16% 4.18%
Return on Equity 15.68% 4.93% 17.96% -54.61% 5.71% 4.93%
Debt/Capital 43.91% 40.36% 41.79% 12.11% 66.90% 58.97%
P/E (F1) 25.10 25.10 14.96 NA 38.54 39.35
Price/Sales (P/S) 2.38 1.28 2.08 14.57 1.28 0.82
Price/Book (P/B) 3.64 2.18 2.72 0.95 2.17 2.19
Price/Cash Flow (P/CF) 14.98 11.93 11.10 NA 5.85 8.32
YTD % Price Change 14.90% -36.79% -13.65% -24.88% -6.89% -13.60%
Description Business Services > Business Service > Waste Removal Services
US Ecology, Inc., formerly known as American Ecology Corporation, provides radioactive, PCB, hazardous, and non-hazardous waste
services to commercial and government customers throughout the United States. The Company operates through its subsidiaries and
provides its services to steel mills, medical and academic institutions, refineries, chemical manufacturing facilities and the nuclear power
industry. Its subsidiaries include US Ecology Nevada, Inc., US Ecology Washington, Inc., US Ecology Texas, Inc., US Ecology Idaho,
Inc., and US Ecology Field Services, Inc. The Company operates through two business segments: operating disposal facilities and non-
operating disposal facilities. US Ecology, Inc. is headquartered in Boise, Idaho.

OHI
Omega Healthcare Investors, Inc. (NYSE:OHI) Zacks Rank: 3-Hold

52 Week High-Low $38.34 - $24.90 Price, Consensus & Surprise

20 Day Average
2,513,743
Volume
Beta 0.17
Market Cap 6.77 B
Industry Reit And Equity ..
101 / 257 (Top

Industry Rank
39%)
Proj. EPS Growth (F1) -7.58%
P/E (F1) 11.04
Earnings ESP 0.00%
Q1 Q2 F1 F2 Q1 Q2 F1 F2

# Up 1 1 3 2 30 Days Ago 0.76 0.77 3.05 3.13

# Down 2 2 2 3 60 Days Ago 0.76 0.77 3.03 3.12
Trend of
Revisions: 0% 0% +0.66% +0.32%
Industry Comparison Reit And Equity .. | Position in Industry: 22 of 117 Industry Peers
OHI X Industry S&P 500 UNIT XHR DRH
Hist. EPS Growth (3-5 yrs) 6.16% 4.82% 8.13% NA -0.51% NA

Proj. Sales Growth (F1/F0) -3.67% 3.49% 6.37% 10.58% 11.28% -1.28%
Net Margin 31.91% 15.95% 10.94% 1.76% 9.93% 10.45%
Return on Equity 7.32% 5.34% 17.96% -1.33% 5.96% 4.74%
Debt/Capital 54.79% 46.36% 41.79% NA 38.60% 32.71%
P/E (F1) 11.04 12.67 14.96 5.96 7.48 8.73
Price/Sales (P/S) 7.66 5.07 2.08 2.68 1.79 2.15
Price/Book (P/B) 1.78 1.31 2.72 NA 1.03 0.95
YTD % Price Change 22.44% -14.86% -13.65% -16.30% -23.39% -22.32%
Description Finance > Real Estate > Reit And Equity Trust - Other
Omega Healthcare Investors, Inc. was incorporated in the State of Maryland. It is a self-administered real estate investment trust (REIT),
investing in income producing healthcare facilities, principally long-term care facilities located in the United States (U.S.) and the United
Kingdom (U.K.). The Company provide lease or mortgage financing to qualified operators of skilled nursing facilities (SNFs) and, to a
lesser extent, assisted living facilities (ALFs), independent living facilities and rehabilitation and acute care facilities. It has historically
financed investments through borrowings under its revolving credit facilities, private placements or public offerings of its debt and equity
securities, the assumption of secured indebtedness, retention of cash flow, or a combination of these methods.

HCA
HCA Healthcare, Inc. (NYSE: HCA) Zacks Rank 3-Hold

52 Week High-Low $147.42 - $84.92 HCA Healthcare’s shares have outperformed its industry’s gain in a year’s time. Its
20 Day Average Volume 2,076,133
top line has been growing over the last several quarters on higher admissions as well
as improved payor and service mix. A number of acquisitions helped the company
Beta 0.52
gain a strong foothold in the industry, fueling its inorganic growth. The company has
Market Cap 39.97 B also raised its guidance from its previous projections. A strong balance sheet and free
Dividend / Div Yld $1.40 / 1.21% cash flow are a couple of other positives for the company. However, its high operating
Industry Medical - Hospital
expenses continue to weigh on the margins. The company is expected to witness a
rise in costs due its constant growth-related investments, which in turn would not allow
Industry Rank 228 / 257 (Bottom 11%)
the debts to reduce, remaining a concern.
Current Ratio 1.61
Debt/Capital NA%
Elements of the Zacks Rank
Net Margin 6.82%
Price/Book (P/B) NA Agreement Estimate Revisions (60 days)
Price/Cash Flow (P/CF) 8.91
Earnings Yield 8.04% 91% 57% 82% 90%

Debt/Equity -8.82
Value Score Q1 (Current Qtr) Q2 (Next Qtr) F1 (Current Year) F2 (Next Year)
Revisions: 11 Revisions: 7 Revisions: 11 Revisions: 10
P/E (F1) 12.44
P/E (F1) Rel to Industry -1.84
PEG Ratio 1.02 Magnitude Consensus Estimate Trend (60 days)

P/S (F1) 0.85
P/S (TTM) 0.88
P/CFO 8.91
P/CFO Rel to Industry NA
EV/EBITDA Annual 8.78 60 30 7 Current 60 30 7 Current 60 30 7 Current 60 30 7 Current

Growth Score Q1 -3.37% Q2 +0.42% F1 +1.19% F2 +1.30%
Proj. EPS Growth (F1/F0) 41.70%
Hist. EPS Growth (Q0/Q-1) 19.08% Upside Zacks Consensus Estimate vs. Most Accurate Estimate
Qtr CFO Growth 44.72
Return on Equity (ROE) -73.71%
(NI - CFO) / Total Assets -3.81 Most Accurate: 2.58 Most Accurate: 2.37 Most Accurate: 9.34 Most Accurate: 10.11
Asset Turnover 1.25
Q1 0.00% Q2 0.00% F1 0.00% F2 0.00%
Momentum Score
1 week Volume change 1.66% Surprise Reported Earnings History

(Q1) EPS Est 1 week change 0.00% Surprise
Q End 09/18 Q End 06/18 Q End 03/18 Q End 12/17

HCA
12/26/2018
Overview
Effective May 8, 2017, the company’s name was changed to HCA
Healthcare, Inc. from HCA Holdings, Inc. It is the largest non-
governmental operator of acute care hospitals in the U.S.
Headquartered in Nashville, TN, it operates hospitals and related
health care entities. It operates in two geographically organized
groups – the National and American Groups.
The National Group includes 84 hospitals across Alaska, California,

Florida, southern Georgia, Idaho, Indiana, northern Kentucky,
Nevada, New Hampshire, South Carolina, Utah and Virginia.
The American Group includes 79 hospitals across Colorado, northern

Georgia, Kansas, southern Kentucky, Louisiana, Mississippi,
Missouri, Oklahoma, Tennessee and Texas. The company also
operates six hospitals in England that are included in the Corporate
and Other group.

HCA
Reasons To Buy:
Share Price Performance: Shares of HCA Healthcare have soared nearly 30.3% in a The company's numerous
year’s time, outperforming the industry's surge of 11.8%. The company's strong acqusitions, its diversified
fundamentals are also expected to keep the momentum in the stock alive in the coming business, strong balance
quarters. The stock also boasts a Value Score of A. sheet should drive long
term growth.
2018 Guidance Raised: Following a better than expected third quarter earnings the
company has raised guidance for 2018. It now expects 2018 revenues to be in the
range of $46-$47 billion, up from its prior estimate of $45.5-$46.5 billion. Moreover, adjusted EBIDTA should be between $8.7 and
$8.9 billion, up from the prior guided range of $8.65-$8.85 billion. EPS is projected to be in the band of $9.05-$9.45, up from $9-
$9.40. The company reiterates its capex view of about $3.5 billion.
Consistent Growth in Top Line: HCA Healthcare has sustained growth for long. Its revenues witnessed a five-year (2012-17)
CAGR of 5.7%, backed by an increase in same facility admissions and equivalent admissions, same facility emergency room growth
and surgical growth. The same increased 7.3% in the first nine months of 2018 owing to higher admissions. We expect the trend to
continue, given the company’s efforts to enter large, fast-developing urban markets with growing population in constant need of its
services.
Acquisitions Fueling Inorganic Growth: HCA Healthcare has been emphasizing acquisitions for expedited growth. Its inorganic
growth strategies have led to an increase in patient volumes enabled network expansion across several markets and added
hospitals to its portfolio. The company’s acquisitions are expected to add scale to its business, positioning it better to weather the
regulatory uncertainty in the healthcare sector. During the nine months of 2018, it paid $788 million to buy two hospital facilities and
$268 million to buy nonhospital health care entities. The company is all set to acquire Mission Health for a value of $1.5 billion,
subject to closing conditions.
Strong Balance Sheet: HCA Healthcare’s balance sheet and cash flows (the company has consistently generated increased free
cash flow for the past several years) are impressive and offer the potential for accretive mergers and acquisitions alongside
shareholder-friendly capital deployment through buybacks. In January 2018, it announced plans to increase its three-year capital
expenditures program to pursue growth opportunities in its existing markets. It now expects 2018 capex to be around $3.5 billion.
Cash flow from operations increased 24.2% year over year to nearly $4.6 billion in the first nine months of 2018.
Reasons To Sell:
Rising Expenses: The company has witnessed escalating expenses, which rose from HCA Healthcare suffers
$28 billion to $39 billion from 2009 to 2017. This momentum also persisted in the first from weakness in
nine months of 2018 with the metric rising 5.2% year over year due to higher salaries international operations.
and benefits plus other operating costs. The company is expected to witness a rise in Negative return on equity
costs due its constant growth-related investments. and stretched valuation
makes the stock look
High Debt: The company’s leverage ratio (total debt to capital) of 113% is higher than unattractive
the industry’s average of 102%. Moreover, its interest coverage ratio stands at 3.62,
significantly lower than the industry’s coverage of 24.60. Its escalating costs seem to
have a negative impact on the debts, because of which the company might not be able to reduce its debts. We expect the company
debts to remain at elevated levels as the company takes on debt to finance buyouts.
Weak ROE: Further, HCA Healthcare’s trailing 12-month return on equity (ROE) undermines its growth potential. ROE of -73.7%
reflects a decline since 2015. The company's negative ROE reflects the company’s inefficiency in using shareholders’ funds.

HCA Healthcare’s Q3 Earnings Beat Estimates, Up Y/Y Quarter Ending 09/2018
HCA Healthcare, Inc. reported third-quarter 2018 adjusted earnings of $2.16 per share, Report Date Oct 30, 2018
surpassing the Zacks Consensus Estimate by 11.9%. Moreover, the bottom line shot up Sales Surprise 1.46%
nearly 78.5% year over year. This upside was backed by higher same facility admissions. EPS Surprise 11.92%
Quarterly EPS 2.16
The company’s net income per share of $2.15 in the third quarter includes 1 cent gained
from the sale of facilities and 2 cents from the loss on retirement of debt.

HCA
Quarterly Details
HCA Healthcare generated revenues of $11.4 billion, beating the Zacks Consensus Estimate of $11.3 billion by 1.6%. The top line was
up 7.1% from the year-ago period, primarily driven by higher admissions.
Same facility equivalent admissions increased 3.4% year over year while same facility admissions rose 3.1%. Same facility revenues
per equivalent admission grew 3.9%.
In the third quarter, cash flow from operations totaled $1.721 billion.
Expenses increased nearly 4.7% year over year to $10.3 billion.
Adjusted EBITDA totaled $2.1 billion, up 18.0% year over year.
As of Sep 30, 2018, HCA operated 179 hospitals and around 1,800 sites of care including surgery centers, freestanding emergency
rooms, urgent care centers and physician clinics.
Financial Update
As of Sep 30, 2018, the company had cash and cash equivalents of about $868 million, total debt of $33.2 billion and total assets of
$37.7 billion.
During the reported quarter, capital expenditures summed $880 million excluding acquisitions. Cash flows from operating activities were
$1.5 billion, up 12.6% year over year.
Dividend Update
HCA Healthcare has announced a quarterly cash dividend of 35 cents per share payable Dec 28 to stockholders of record at the close
of business on Dec 3, 2018.
2018 Outlook Updated
The company expects 2018 revenues in the range of $46-$47 billion, up from its prior estimate of $45.5-$46.5 billion. Moreover, it now
anticipates adjusted EBIDTA to be between $8.7 and $8.9 billion, up from the prior guided range of $8.65-$8.85 billion. EPS is projected
to be in the range of $9.05-$9.45, up from $9-$9.40. The company reiterates its capex view of about $3.5 billion.
Recent News
Reston Hospital Acquires a Second Mazor X System - Dec 12, 2018
The Virginia Institute of Robotic Surgery, a unit of HCA Healthcare has acquired a second Mazor X System for their rapidly growing
spine program, making it the first in the nation to have two of these robotic systems at one hospital location.
The Reston Hospital Center Spine Team is comprised of nationally-recognized spine surgeons who excel in implementing the latest in
surgical advancements for spinal procedures.

HCA
Industry Analysis Zacks Industry Rank: 228 / 257 (Bottom 11%) Top Peers
BioTelemetry, Inc. (BEAT)

Anthem, Inc. (ANTM)
American Renal Associates Holdings, Inc (ARA)
Universal Health Services, Inc. (UHS)
Community Health Systems, Inc. (CYH)
Tenet Healthcare Corporation (THC)
Mednax, Inc (MD)
AAC Holdings, Inc. (AAC)
Industry Comparison Medical - Hospital | Position in Industry: 1 of 6 Industry Peers
HCA X Industry S&P 500 THC CYH UHS

VGM Score - -
Market Cap 39.97 B 329.08 M 17.71 B 1.73 B 329.08 M 10.49 B
# of Analysts 10 9 14 11 10 8
Dividend Yield 1.21% 0.00% 2.26% 0.00% 0.00% 0.35%
Value Score - -
Cash/Price 0.01 0.15 0.06 0.28 1.00 0.01
EV/EBITDA 8.78 8.37 11.07 8.37 -13.00 8.16
PEG Ratio 1.02 1.02 1.45 0.84 NA 1.13
Price/Book (P/B) NA 1.46 2.72 2.62 NA 1.95
P/E (F1) 12.44 10.94 14.96 10.49 NA 11.97
Price/Sales (P/S) 0.85 0.73 2.08 0.09 0.02 0.98
Earnings Yield 8.04% 8.74% 6.66% 9.55% -72.44% 8.35%
Debt/Equity -8.82 0.67 0.66 21.55 -11.98 0.68
Cash Flow ($/share) 13.04 5.32 5.82 9.87 6.36 12.45
Growth Score - -
Hist. EPS Growth (3-5 yrs) 19.08% 8.33% 8.13% -0.56% -43.80% 13.25%
Proj. EPS Growth (F1/F0) 41.70% 19.87% 17.38% 98.21% -71.13% 25.80%
Curr. Cash Flow Growth -2.17% -1.45% 10.00% 0.20% -36.81% 3.21%
Hist. Cash Flow Growth (3-5 yrs) 6.01% 8.09% 7.47% 9.35% -6.91% 10.41%
Current Ratio 1.61 1.47 1.30 1.06 1.50 1.09
Debt/Capital NA% 40.42% 41.79% 95.96% NA 40.42%
Net Margin 6.82% 6.82% 10.94% -0.61% -17.97% 7.89%
Return on Equity -73.71% 7.71% 17.96% 47.38% -36.38% 16.33%
Sales/Assets 1.25 0.82 0.56 0.82 0.81 0.97
Proj. Sales Growth (F1/F0) 6.69% 1.61% 6.37% -5.22% -8.33% 3.23%
Momentum Score - -
Daily Price Chg -3.29% -1.44% -2.59% -3.93% -2.08% -0.96%
1 Week Price Chg -5.25% -5.45% -6.46% -17.42% -26.28% -5.47%
4 Week Price Chg -13.93% -13.97% -11.77% -25.01% -21.17% -13.97%
12 Week Price Chg -16.53% -20.30% -19.62% -40.79% -18.21% -11.28%
52 Week Price Chg 30.35% -16.19% -14.29% 11.37% -29.95% -1.43%
20 Day Average Volume 2,076,133 937,374 2,702,241 1,435,501 2,742,520 1,019,699
(F1) EPS Est 12 week change 1.21% -5.44% 0.22% -7.00% -37.67% -0.39%
(Q1) EPS Est Mthly Chg 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

HCA

Agreement
component.
Magnitude
Upside
Surprise
surprising again.

a C; and so on.
VGM Score

HCA
Disclosures

HMSY
HMS Holdings Corp (NASDAQ:HMSY) Zacks Rank: 1-Strong Buy


52 Week High-Low $38.15 - $14.88
20 Day Average
828,995
Volume
Beta 1.35
Market Cap 2.22 B
Industry Medical Info Sys..
58 / 257 (Top
Industry Rank
23%)
P/E (F1) 25.89
Earnings ESP 2.25%
Q1 Q2 F1 F2 Q1 Q2 F1 F2
# Up 4 3 8 8 30 Days Ago 0.25 0.20 1.01 1.08

# Down 2 0 0 0 60 Days Ago 0.25 0.18 0.93 1.02
Trend of
Revisions: 0% +11.11% +9.68% +7.84%
Industry Comparison Medical Info Sys.. | Position in Industry: 1 of 20 Industry Peers

HMSY X Industry S&P 500 NXGN MDSO OMCL
Hist. EPS Growth (3-5 yrs) 6.64% 21.55% 8.13% 0.72% 39.90% -18.29%
Proj. Sales Growth (F1/F0) 14.67% 3.45% 6.37% -0.12% 16.70% 10.34%
Net Margin 8.01% -12.69% 10.94% 1.17% 8.43% 6.11%
Return on Equity 10.63% -14.10% 17.96% 10.23% 10.70% 7.91%
Debt/Capital 26.91% 21.57% 41.79% 10.57% 13.10% 21.25%
P/E (F1) 25.89 23.04 14.96 20.18 36.99 27.90
Price/Sales (P/S) 3.76 1.86 2.08 1.78 6.06 2.92
Price/Book (P/B) 3.39 3.18 2.72 2.65 6.22 3.65
YTD % Price Change 56.34% -22.81% -13.65% 7.36% -4.72% 17.46%
Description Medical > Medical Products > Medical Info Systems

HMS Holdings Corp. is a leading provider of cost containment solutions in the U.S. healthcare marketplace. Using innovative technology
as well as extensive data services and powerful analytics, the Company delivers coordination of benefits, payment integrity, and health
management and member engagement solutions to help customers recover improper payments; prevent future improper payments;
reduce fraud, waste and abuse; effectively engage their members and better manage the care they receive; and ensure regulatory
compliance. The Company serves commercial health plans, state government agencies, federal programs, at-risk providers, pharmacy
benefit managers and employers.

ROL
Rollins, Inc. (NYSE:ROL) Zacks Rank: 3-Hold

52 Week High-Low $42.94 - $29.81 Price, Consensus & Surprise

20 Day Average
1,392,447
Volume
Beta 0.31
Market Cap 11.06 B
Building
Industry
Product..
243 / 257 (Bot

Industry Rank
5%)
P/E (F1) 46.43
Earnings ESP 0.00%
Q1 Q2 F1 F2 Q1 Q2 F1 F2
# of Analysts 2 NA 3 4 Current 0.14 NA 0.73 0.72
# of Revisions 2 NA 3 1 7 Days Ago 0.14 NA 0.73 0.72
# Up 0 NA 2 0 30 Days Ago 0.17 NA 0.72 0.79

# Down 2 NA 1 1 60 Days Ago 0.17 NA 0.72 0.79
Trend of
% Revision Agreement: 100% 67% 100% Estimate
Revisions: -17.65% +1.39% -8.86%
Industry Comparison Building Product.. | Position in Industry: 1 of 5 Industry Peers

ROL X Industry S&P 500 TISI LMB SERV
Hist. EPS Growth (3-5 yrs) 12.06% 7.46% 8.13% -31.70% NA 43.09%
Proj. Sales Growth (F1/F0) 8.85% 4.48% 6.37% 4.48% 10.27% -26.73%
Net Margin 11.97% 1.52% 10.94% -5.84% -0.78% 16.61%
Return on Equity 32.90% 8.70% 17.96% -5.97% -5.30% 23.65%
Debt/Capital NA 38.28% 41.79% 46.34% 5.85% 65.50%
P/E (F1) 46.43 16.37 14.96 NA NA 16.37
Price/Sales (P/S) 6.17 0.34 2.08 0.34 0.06 1.51
Price/Book (P/B) 15.05 1.30 2.72 0.98 0.74 3.27
YTD % Price Change 8.93% -23.70% -13.65% -4.77% -70.14% -33.14%
Description Business Services > Business Service > Building Products - Maintenance Service
Rollins, Inc. is a premier global consumer and commercial services company. Rollins, Inc. provides essential pest control services and
protection against termite damage, rodents and insects. Through its wholly owned subsidiaries, Orkin LLC., Orkin Canada, Western Pest
Services, The Industrial Fumigant Company, HomeTeam Pest Defense, AllPest, Critter Control, Inc., Trutech LLC., Waltham Services
LLC., PermaTreat, Crane Pest Control, Statewide Pest Control, Murray Pest Control, Safeguard Pest Control, and Northwest
Exterminating.

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2019 Annual Issue

Stock Selection Process 5

Frequently Asked Questions 54

2019 Annual Issue 2

2019 Annual Issue 3

Have a prosperous 2019,

2019 Annual Issue 4

With the portfolio designed to follow a buy-and-hold

Below we outline the rigorous 5-step process for se-

Step 1: Zacks Rank

For more information please refer to the Zacks Rank Guide.

Step 2: Zacks Industry Rank

Step 3: Value Analysis

2019 Annual Issue 5

Step 4: Fundamentals & Management Effectiveness

Step 5: Broker Sentiment

Is the company receiving upgrades or is it being hammered with downgrades? Stocks

2019 Annual Issue 6

Vocera Communications, Inc. (Ticker: VCRA)

2019 Annual Issue 7

ing, driven by both new customer shipments and cross-selling success.

Vocera is expected to report December-quarter results on February 14th. In its September-

Research report on Vocera Communications, Inc. (VCRA)

Generac Holdings Inc. (Ticker: GNRC)

It enjoys a strong competitive position in the residential market in terms of distribution,

2019 Annual Issue 8

residential market is barely at 4%.

Research report on Generac Holdings Inc. (GNRC)

2019 Annual Issue 9

Ubiquiti Networks, Inc. (Ticker: UBNT)

2019 Annual Issue 10

On the earnings front, Ubiquiti is scheduled to report December-quarter results on Febru-

Research report on Ubiquiti Networks, Inc. (UBNT)

Intercontinental Exchange, Inc. (Ticker: ICE)

2019 Annual Issue 11

cember-quarter results for ICE as well as other industry players.

2019 Annual Issue 12

Research report on Intercontinental Exchange, Inc. (ICE)

Bright Horizons Family Solutions, Inc. (TICKER: BFAM)

2019 Annual Issue 13

2019 Annual Issue 14

Research report on Bright Horizons Family Solutions, Inc. (BFAM)

US Ecology, Inc. (Ticker: ECOL)

2019 Annual Issue 15

2019 Annual Issue 16

Research report on US Ecology, Inc. (ECOL)

Omega Healthcare Investors, Inc. (Ticker: OHI)

2019 Annual Issue 17

stantial lease renewal risk, along with favorable near-term supply.

Research report on Omega Healthcare Investors, Inc. (OHI)

2019 Annual Issue 18

HCA Healthcare, Inc. (Ticker: HCA)

2019 Annual Issue 19

and infrastructure. Sources of operating efficiencies include internally developed medical

Research report on HCA Healthcare, Inc. (HCA)

2019 Annual Issue 20

HMS Holdings Corp. (Ticker: HMSY)

2019 Annual Issue 21

Research report on HMS Holdings Corp. (HMSY)

Rollins, Inc. (Ticker: ROL)

2019 Annual Issue 22

Research report on Rollins, Inc. (ROL)

2019 Annual Issue 23