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What Stocks Should You Bet On In The Business Services Industry?

Identifying investment opportunities can be tricky, so investors can start by narrowing down to specific sectors and industries.

The business services industry is one of the most segmented industries and provides a challenging task when it comes to identifying value plays.

This industry has enjoyed significant growth over the last few years as illustrated by some of the best-performing stocks.

The financial services and business automation services segments are among the best performing in the industry, while global logistics also offers interesting opportunities.

Investors mostly identify investment opportunities by following particular stocks, but given the enormous number of companies listed in various exchanges, the job of finding stocks that provide value for money can be tasking.

This is why some investors prefer to narrow down the search to specific sectors/industries in a bid to finding the best players in the market. Doing so also helps them identify the most-attractive sectors/industries to invest in at a given time.

Now, the business services industry is one of the most fragmented industries in the market and it is particularly tricky to determine the specific direction of a segment. Nonetheless, this does not make it impossible to identify some of the best-performing players in the market, and this can help towards choosing which segment of the industry to focus on when identifying value plays.

Analysis of some of the best performing stocks in the industry for the last 12 months

The payment solutions segment is one of the best performers in the industry with Global Payments (NYSE:GPN) at the top of the list. The company provides payment solutions for credit cards, debit cards, electronic payments, and check-related services in North America and internationally.

Global Payments has rallied more than 60% in the last 24 months, making it the best-performing stock in the business services industry during that period. This is largely due to the increasing usage of global payment solutions, especially in digital payments.

The same can also be said for Euronet Worldwide (NASDAQ:EEFT), which is up about 56% during the same period, while Ventiv (NYSE:VNTV) and SYNNEX (NYSE:SNX) are up 48% and 45%, respectively. This is a massive return on investment compared to about 5% overall gain for the S&P 500.

Notably, Global Payments, Ventiv and Euronet Worldwide operate in the financial services segment of the business services industry. They are not specifically banks or money managers, which means they cannot be categorized in the Financial Sector.

On the other hand, SYNNEX operates in two segments, including supply/distribution of technology peripherals, and process automation for businesses. The latter segment puts it more on the service category.

The growth in value shown by these businesses over the past 24 months suggests that something good is going on in the industry, and by looking at some of the key metrics including revenue, net income and cash from...