Bull of the Day: ServiceMaster Global (SERV)

ServiceMaster Global (SERV - Snapshot Report) has a name only an investor can love. It is almost as if they want you to dig into the story to learn what is going on with this stock. Who are they? What would a service master do? Well today, you are getting those questions answered and more as SERV is a Zacks Rank #2 (Buy) and has an "A" Growth Style Score and today it is the Bull of the Day.

Aren't Bulls of The Day #1 Ranked Stocks?

DescriptionBeing the Bull of the Day is all about why a stock has reached the highly desired position of a Zacks Rank #1 (Strong Buy). Today I am making an exception for SERV as I think this is a story that needs to be told to a wider audience and the Zacks Rank is likely to move higher for this stock in the coming days. I will touch on that idea after I review the recent earnings report.

ServiceMaster Global is a holding company for a number of household names. It operates in three segments: Terminix, American Home Shield, and the Franchise Services Group. The Terminix segment offers termite and pest control services.

The American Home Shield segment provides home warranty plans that cover the repair or replacement of household systems and appliances.

The Franchise Services Group is made up of ServiceMaster Restore, ServiceMaster Clean, Merry Maids, Furniture Medic, and AmeriSpec brands. ServiceMaster Global Holdings, Inc. is headquartered in Memphis, Tennessee.

So while Terminix is the biggest part of the company, there is still plenty of people that have heard of American Home Shield and even Merry Maids and Furniture Medic.

Earnings History

There are only two earnings reports for SERV in the Zacks Research System. There have been a total of three reports, so let's just go over that last two in a little bit of depth.

The December 2014 quarter saw revenue of $664M, $88M above the Zacks Consensus Estimate of $576M. The company was able to produce EPS of $0.45, $0.11 better than the Zacks Consensus Estimate which translates into a 32% positive earnings surprise.

The March 2015 quarter, which was reported on 4/28/15 was another beat. Revenues of $571M were in line with consensus, but there was another beat on the bottom line. The company reported EPS of $0.33 vs $0.27 consensus for a 22% positive earnings surprise.

The most recent quarter came in 6 cents ahead of estimates and that likely means that analysts will be adding at least six cents to their estimates for 2015. That sort of increase to estimates is likely to drive the Zacks Rank back to a #1 (Strong Buy) position soon. At the time this article was written, there were no estimate revisions for this quarter in the Zacks Research System, but it is very likely they will be incorporated into the Rank on 4/30/15.